Opposition leader warns budget will fuel inflation

Guðrún Hafsteinsdóttir, leader of Iceland’s Independence Party, has strongly criticised the government’s budget bill, saying it will place heavier financial burdens on households and businesses, mbl.is reports.

“Last autumn, the prime minister promised an autumn of value creation. It became a spring of interest-rate hikes, and now we are heading for an inflation winter,” Guðrún wrote in a Facebook post.

She said the government planned to raise nearly 23 billion Icelandic krónur through new taxes and charges, in addition to tax increases already introduced. She also pointed to plans to raise the mileage charge by nearly 16 per cent.

“A balanced budget is, of course, an important goal. But higher charges on people in this country cannot replace lasting restraint in government operations. No nation has ever taxed itself into prosperity,” Guðrún said.

She added that households and businesses were still waiting for the government to fulfil its promises of lower inflation and interest rates.

“I sincerely hope this budget bill will deliver on those promises. Unfortunately, everything indicates that it will not,” she said.