Sept. 14 (Bloomberg) -- Norwegians are evenly divided as voting started on who will lead the world’s second-richest nation for the next four years, opinion polls show.

Voters are split between re-electing Prime Minister Jens Stoltenberg’s Labor-led coalition, which guided the nation out of a recession, and giving the helm to a splintered opposition promising tax cuts and increased spending. Voting booths close today at 9 p.m., after which exit polls will be released.

“It’s almost 50-50 if you look at the polls,” said Johannes Bergh, a political scientist at the Institute for Social Research in Oslo. “The trend in the last few elections is that the sitting government loses some of its support even if they do fairly well.”

Stoltenberg, 50, and his partners, the Socialist Left and the Center Party, this year spent a record of the nation’s $420 billion oil fund to spur the economy out a slump and keep unemployment at the lowest in Europe. The opposition seeks to keep the premier from becoming the first leader re-elected in 16 years, citing a failure to shorten hospital queues, improve 93,000 kilometers of public roads and eradicate poverty.

The four-party opposition, led by the Progress Party and the Conservatives, had a majority of parliamentary seats in two out of four polls in the final two days before the vote. The bloc, which includes the Christian Democrats and Liberals, had support of 49.8 percent, according to the average of the polls, while the government coalition got 46.8 percent.

Economic Situation

Labor had backing of 33.1 percent, while the Progress Party had support of 21.6 percent. The Socialist Left and the Center Party had backing of 7.5 percent and 6.2 percent, respectively.

“At least the economic situation argues for a continued red-green coalition because Norway has been very little hit by the financial crisis,” Erik Bruce, senior economist at Nordea Bank AB, said in an interview.

Norway, second-richest per capita after Luxembourg, emerged from a recession last quarter after a milder slump than its Nordic neighbors because of investments in its oil industry and larger stimulus measures. The so-called mainland economy will grow 1 percent next year after shrinking 1.4 percent this year, Norway Statistics forecasts. The central bank cut interest rates to a record 1.25 percent and policy makers signaled in August that rates may rise earlier than previously predicted as a recovery starts.

Struck Oil

The wealth amassed since Norway struck oil in the North Sea 40 years ago has posed problems for successive governments in balancing demands for spending and avoiding overheating the economy. Norway is the world’s fifth-largest oil exporter.

Infighting among the opposition, with the Liberals and Christian Democrats reluctant to back the Progress Party because of its anti-immigration message, threaten to sunder efforts to form a government. This may leave Labor in power with a minority government, such as between 2000 and 2001.

“It will be very difficult to form a center-right government because they have made promises that make it impossible,” said Bergh. “If there’s just a lot of bickering on the center-right then we are going to have a minority labor government.”

The Conservatives, backed by 16.9 percent in the average of polls, for the first time are open to forming a coalition with the Progress Party. Leader Erna Solberg, 48, is also considering the two smaller parties, which have been its traditional allies and formed a government from 2001 to 2005. The Liberal Party had support of 5 percent and Christian Democrats had 6.3 percent.

Tax Cuts

The Progress Party, led by 40-year-old Siv Jensen, wants to raise spending on health care and the elderly and scrap a rule limiting spending of the oil money. It proposes to cut taxes by at least 30 billion kroner, state-asset sales, including part of a stake in StatoilHydro ASA, and limiting immigration.

Jensen, who seeks to emulate Margaret Thatcher, this year said Norway was in danger of “sneak Islamization” because of an influx of immigrants. She said she wouldn’t back a government of the other opposition parties. The party has never been in power since being formed as anti-tax movement in 1973.

The Conservatives, the second-biggest party in opposition, have also promised immediate tax cuts of 5 billion kroner.

Stoltenberg says the tax cuts will erode the welfare state the Labor party has helped build.

“We want to use the money for better elderly care, nursery home places for all that need them, more teachers in schools and record investments in roads and railways,” Stoltenberg said yesterday in a debate at a downtown Oslo restaurant. “This is more important than lower taxes. That’s the main difference between us and the conservative parties.”

The government opposes lifting a fiscal guideline that limits spending to 4 percent of the oil fund over time even as it this year will seek to spend 130 billion kroner, or almost 6 percent of the oil fund, to revive the economy amid the worst global financial crisis since the Great Depression.

“There is always demand that the government should do more,” said Bergh.

To contact the reporter on this story: Josiane Kremer in Oslo at Jkremer4@bloomberg.net.

Last Updated: September 14, 2009 01:00 EDT