MP says government’s 5.2% fee rises undermine anti-inflation efforts

Independence Party MP Guðlaugur Þór Þórðarson accused the government of failing to help curb inflation and said its planned 5.2% increases in the budget bill risk undermining wage agreements, mbl.is reported.

Guðlaugur Þór, his party’s representative on Parliament’s budget committee, said the government led by Kristrún Frostadóttir was the only party taking no action to lower inflation. Government leaders had not agreed to interviews to respond to efforts by municipalities and businesses to keep price increases within the Central Bank of Iceland’s 2.5% inflation target, he said.

Business groups and labour unions have called for increases to be held back to curb price rises and lower inflation. They also want to help prevent collective agreements from being terminated in just over a week.

Guðlaugur Þór said the government was trying to “play” municipalities, unions and businesses by including what he called tactical fee increases in the budget bill. He referred to comments by Social Democratic Alliance MP Arna Lára Jónsdóttir, who had publicly described the increases as tactical.

He said the government’s planned 5.2% increases showed it did not trust inflation to fall. He also criticised the government for not reducing its debt, arguing that this helped keep interest rates high. “The government gets a zero for its fight against inflation, and it gives itself that mark,” he said.