Election Fever in the Air

   Mar 25, 2024     2 min read

At the ongoing parliamentary session, the government has approved numerous policies and plans, with the expectation that more will be added. Included in these is the financial plan, where the government must demonstrate how it intends to finance the proposed projects and policies numerically. It appears there is not sufficient funding for all of these initiatives, and the government might need to reconsider or even abandon some of the recently approved plans.

During this session, proposals such as the strategic plan for municipal affairs for the years 2024-2038 and the action plan for 2024-2028, strategic initiatives to bolster the knowledge society in Iceland until 2025, a policy for Icelandic Sign Language for 2024-2027, and an action and implementation plan for the affairs of disabled people for 2024-2027 have already been approved.

Currently in committee are the transportation plan for 2024-2038 along with a five-year action plan for 2024-2028, a housing strategy for 2024-2038 also accompanied by a five-year action plan for 2024-2028, an action plan for Icelandic language affairs 2023-2026, a national land-use policy for 2024-2038 with a corresponding five-year action plan for 2024-2028, and a policy for Iceland’s support of Ukraine for 2024-2028.

The financial plan itself is yet to be presented, and in a sense, the bill concerning the national treasury can also be seen as a kind of plan, as it needs to somehow finance the fund. This bill is awaiting its first reading. In addition to this, there are the wage agreements, but the newly negotiated wage agreements have depleted the capital that the government had reserved in the budget contingency fund, meaning the financing for public employee wage agreements is yet to be secured. Two policies were then presented to the government at the last cabinet meeting: A proposal for a parliamentary resolution on a literary policy for the years 2024-2030 and a proposal for a parliamentary resolution on a tourism policy and action plan up to 2030.

The national treasury is already running a deficit, and these new plans and projects add to this shortfall. Moreover, there are recognized challenges in nearly all sectors, including policing, prisons, territorial waters, natural disasters, health, education, immigration, energy, nursing, housing, agriculture, and environmental affairs. The state’s burden of interest payments is also at an all-time high. These circumstances highlight that the government is facing complex and substantial challenges in financing and policymaking.

Now is the time for prioritizing in state finances. Instead, the government is rolling out various policies that it knows it cannot finance. These are irresponsible methods that create false expectations among the public, which are unlikely to be fulfilled. In other words, there’s an aura of electioneering about these practices.