Labour leader says 2027 budget increases burden on public

Finnbjörn A. Hermannsson, president of the Icelandic Confederation of Labour, says the government is increasing the burden on the public through next year’s budget, mbl.is reports.

He cited an increase in the kilometre charge and said the personal tax credit was not being raised as it should be. The difference amounted to three billion Icelandic krónur, he said.

Child benefits were also failing to retain their value, Finnbjörn said. He added that spending restrictions on the welfare system were appearing through higher user fees, including increased healthcare charges introduced on September 1.

“All these spending restrictions are being taken from people elsewhere,” he said.

Asked about Finance and Economic Affairs Minister Daði Már Kristófersson’s claim that the first balanced budget in eight years would ease pressure on households through disciplined state finances and more efficient use of public funds, Finnbjörn said his response was twofold.

“We support a balanced budget. That is worthwhile, but it needs to be done on the right basis,” he said.

Finnbjörn said the public was being asked to shoulder more of the burden while child benefits were losing value in real terms and the interest rebate system was being dismantled. This would place the burden on the younger generation and create a widening gap between generations if it continued, he said.

Responding to the minister’s statement that wages had increased faster than prices, Finnbjörn said there had indeed been wage drift, but agreed wages had not risen faster than prices.

“Agreed wages are losing value in real terms, while the market has itself increased because of wage drift. This affects people differently,” he said.