From Iceland — Iceland's New Government Formed, Priorities Unveiled

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Art Bicnick/The Reykjavík Grapevine

On December 21, the leaders of the Social Democratic Alliance (Samfylking), Liberal Reform Party (Viðreisn) and the People’s Party (Flokkur Fólksins) presented the makeup of their coalition government and its agenda during a press conference at Hafnarborg in Hafnarfjörður, reports RÚV.

The coalition, led by Prime Minister Kristrún Frostadóttir, promises reforms aimed at streamlining public administration, strengthening welfare programs, addressing climate goals, and improving housing accessibility.

Cabinet Ministers

The coalition’s ministerial lineup includes:

Kristrún Frostadóttir (Samfylking) – Prime Minister
Þorgerður Katrín Gunnarsdóttir (Viðreisn) – Minister of Foreign Affairs
Inga Sæland (Flokkur Fólksins) – Minister of Social Affairs and Housing
Daði Már Kristófersson (Viðreisn) – Minister of Finance and Economic Affairs
Eyjólfur Ármannsson (Flokkur Fólksins) – Minister of Transport and Local Government
Jóhann Páll Jóhannsson (Samfylking) – Minister of Environment, Energy and Climate
Logi Már Einarsson (Samfylking) – Minister of Culture, Innovation, and Universities
Ásthildur Lóa Þórsdóttir (Flokkur Fólksins) – Minister of Education and Children
Alma Möller (Samfylking) – Minister of Health
Þorbjörg Sigríður Gunnlaugsdóttir (Viðreisn) – Minister of Justice
Hanna Katrín Friðriksson (Viðreisn) – Minister of Industries

Administrative and Tax Reforms

The new government aims to simplify the public sector by merging institutions and reducing ministries from 12 to 11. Tax compliance will be enhanced, loopholes closed, and exemptions reduced to ensure a more equitable tax system.

Housing Crisis Solutions

The government will focus on ensuring apartments serve as permanent homes, restricting short-term rentals, and encouraging the development of modular housing and the conversion of commercial properties into residences. Shared equity loans will be streamlined, tenant protections strengthened, and non-profit housing organisations supported.

Energy and Climate Affairs

The government will expand energy production, strengthen the national grid, and improve energy efficiency. These measures are part of broader efforts to achieve carbon neutrality by 2040.

Resource Management and Fees

Old-age and disability pensions will see annual increases linked to the wage index, with a minimum adjustment to match inflation. The old-age pension exemption will gradually rise to 60,000 ISK per month, easing financial pressures for retirees.

Resource Fees

The government intends to introduce a resource fee for tourists accessing Iceland’s natural attractions. While the details are being developed, arrival fees will be collected. Transparency in the fisheries sector will also be increased, including clearer definitions of related parties in ownership structures.

Culture

The government will emphasize increasing access to cultural life for all residents, regardless of income or location.
Efforts will be made to support the Icelandic language and the nation’s cultural heritage while further boosting exports and value creation in the creative industries.

Education

A significant effort will be made in education to improve the environment for students and teachers. Emphasis will be placed on Icelandic language instruction, literacy, and access to diverse educational materials. The school system will be supported to address challenges and ensure the inclusion of children whose mother tongue is not Icelandic.

Immigration

Immigrants will be given opportunities to learn Icelandic and actively participate in society. The government aims to align immigration regulations with those of neighbouring countries and strengthen public administration to ensure a humane and efficient reception system for asylum seekers. It will be permitted to revoke international protection and deport individuals who commit serious crimes or threaten national security.

Security

The number of police officers will be significantly increased during the term. Organised crime, cybercrime, human trafficking, and gender-based violence will be addressed decisively. Simultaneously, other elements of the judicial system will be strengthened to ensure swift and secure case handling.