A strong public service is an investment in people and peace. However, the government's fiscal policy involves a decreasing share of public expenditure relative to GDP. Austerity policies and the great concentration of wealth that is taking place in this country are harmful to society. They encourage class divisions, increase the risk of marginalization and poverty, and exacerbate inequality in disposable income, health, and education. BSRB rejects this approach, as it undermines social cohesion, weakens the economy, and heightens the risk of political abuse. To address these issues, we need to strengthen public services and transfer systems alongside increasing revenue generation in the public sector.
The government's economic policy decisions should support collective agreements and not reverse the wage increases that employees have earned. Inflation has begun to rise again after a decade of stable prices, which has diminished the purchasing power of employees. This inflation is primarily due to recent years of tax cuts and unexpected major expenditures that have not been met by revenue generation. The government's regulation of market forces takes the form of taxation, while oligopolies in various markets contribute to increased prices. A housing shortage has led to a rise in housing and rental prices that exceeds overall price levels. Promising development plans have not been executed. As a result of inflation, interest rates have risen to levels that are unsustainable for many households and businesses. BSRB demands strict control over price developments alongside the promotion of housing development and robust competition regulations. BSRB emphasizes that the tax system should promote equality and social harmony. Individuals with greater financial means should contribute proportionately more than those who are less well-off. This includes implementing a special tax bracket for the highest incomes and a substantial property tax on the net assets of the wealthiest individuals. BSRB demands that we address the growing wealth inequality and that the assets held by companies not engaged in business operations should be taxed by their owners.
BSRB advocates for increasing the capital gains tax to ensure that it aligns more closely with the income tax on wage income and that the tax rate is higher for those with the highest capital income. Additionally, the rules surrounding the taxation of imputed remuneration need to be tightened, ensuring that a minimum portion of total income is taxed as general income.
Strengthening tax control is essential, as investments in this area can lead to significant returns for public funds through increased taxation. Municipalities play a vital role in providing services to their residents, and their responsibilities are continually on the rise. However, the revenue sources for these municipalities do not keep pace with this growing demand. As a result, municipal employees often receive the lowest wages in the Icelandic labour market, while the development of crucial basic services remains inadequate, leading to increased pressure on staff and families, particularly women. BSRB therefore calls for a review and increase in the share of public tax revenues allocated to municipalities.
Iceland is abundant in natural resources. BSRB demands that resources be publicly owned ensuring that the nation receives its fair share of the dividends generated from their use. Resource fees for companies that utilize common resources should factor in the interest that arises from their exploitation. BSRB demands the importance of public ownership of the essential infrastructure of society and firmly opposes the privatization of public companies.
The introduction of a carbon tax on fossil fuels is a crucial step in reducing greenhouse gas emissions. BSRB demands that before decisions are made on taxation or tax incentives aimed at reducing emissions, a thorough analysis should be conducted to assess its impact on different income groups. If the burden turns out to be heavy on lower-income groups, the response must be with investments in climate-friendly services that can replace those that are being taxed, or direct payments to assist the lower-income individuals who are most affected by the taxation.
BSRB prioritizes improving the circumstances of lower-income families. A society rooted in equality cannot be established unless all families can provide their children with comparable opportunities, regardless of their financial situation or where they live. There should be increased support for single parents, as their children face a much higher risk of falling into poverty compared to others. Iceland is notable among Nordic countries in terms of child benefits. While the Nordic welfare system generally treats the right to child benefits as equal for all children, regardless of their parents' financial status, Denmark differs by reducing benefits for those above or at the average income level. BSRB believes that a comprehensive review of the Icelandic system is essential. It suggests looking to the Danish system as a model and utilizing the best available data on the conditions of families with children as a foundation for this review. In Iceland, the child benefit system has been reformed in connection with collective agreement negotiations; however, more needs to be done to ensure that benefits are not solely tied to the average wage. Currently, only the lowest-income families receive full child benefits. BSRB argues that child benefits should keep pace with wage developments and be equal for all children, regardless of their age.
BSRB emphasizes that housing support systems ensure housing costs do not exceed 25% of disposable income. This approach helps lower-income households and those facing significant living expenses avoid the burden of high housing costs.
The state's direct housing support for homeowners has changed significantly. Now, individuals are allowed to use their tax-free private pension savings to pay off mortgages, rather than receiving housing support from the Treasury through interest subsidies. As a result, people are utilizing their own pension savings to acquire housing, leading to a future loss of tax revenues for the state and municipalities. Additionally, support for the interest subsidy system has declined each year, with financial contributions to the system becoming minimal. Therefore, it is essential to reevaluate housing support for individuals with average or lower incomes who own their homes.
Housing benefits for tenants have increased in recent years in line with rising costs. It is essential to ensure that this trend continues. Housing support for tenants consists of two main components: first, general housing benefits that are income- and asset-related, which are financed by the Treasury; and second, special housing support from municipalities, also income- and asset-related. Some municipalities attach certain social status conditions to the support, while others do not. Efforts have been made to merge these two systems to promote equality among tenants, regardless of their place of residence, but funding for this merger has not yet been secured. BSRB calls for funding to be guaranteed to facilitate the merger of these systems for the benefit of tenants.
Everyone has the right to a secure livelihood at different stages of life, regardless of the circumstances or setbacks they may face. A social safety net is meant to provide support when we become sick, injured, grow old, or lose our jobs. In Iceland, there are vulnerable groups, including the elderly, disabled, unemployed, and working individuals, who struggle with precarious living conditions and experience material deprivation. This situation is both unnecessary and unacceptable. It is essential to ensure that social security payments and the tax-free income limit are adjusted according to wage developments. Additionally, unemployment benefits must be increased to ensure they are at least equal to the lowest wages in the labor market. Income-related benefits should be provided immediately after loss of employment and continue for six months.