News - 13.12.2024

VR's Message to the Government Formation Talks

The Board of VR calls on the political parties currently engaged in government formation talks to safeguard the interests of wage earners, with a particular emphasis on those who have borne the brunt of the economic downturn. The Board of VR reiterates that the labour movement has accepted extremely modest collective agreements in exchange for promises that the state and municipalities would shoulder their responsibilities and that employers would refrain from price hikes. Through this approach, the movement has taken on the risk of a decline in the living standards of wage earners, especially those who face significant housing costs, whether in the rental market or in mortgaged properties. A large number of mortgage holders have lost or are about to lose fixed interest rates, resulting in additional monthly payments amounting to tens or even hundreds of thousands of ISK. At the same time, bank profits are increasing. This situation demands an urgent response, and the Board of VR calls for emergency measures to protect the interests of mortgage holders and renters.

The Board of VR urges the government to address the housing crisis, as it is a prerequisite for achieving economic stability and safeguarding the well-being of wage earners. Young people must be able to secure housing on fair terms, and older people are entitled to suitable housing. The Board believes that it is essential to consider diverse housing solutions and to ensure adequate housing for those aged 60 and over in close proximity to service hubs and nursing homes. Such developments would simultaneously free up housing for families with children.

The Board of VR considers it essential to bridge the gap between parental leave and preschool access, thereby reducing the loss of income and the economic insecurity of families with children. Housing issues play a significant role in this context, but strong support systems, quality healthcare services, mental health services, and free services for children are also crucial. There is a need to explore options for reducing the taxation of minimum wages, alongside reducing the severe reductions in public pension payments caused by pension fund disbursements, and to ensure that the lowest public pension payments are never lower than the minimum wage.

The Board of VR calls on the political parties involved in government formation talks to firmly reject austerity as a way out of economic difficulties. Austerity entails cuts and neglect of public services and infrastructure, privatization of basic services, a policy of high interest rates, and the erosion of the wages and rights of wage earners. Such policies have never succeeded in stabilizing public finances but instead lead to poverty, economic insecurity, and social decline. The Board urges a departure from outdated economic theories and calls for the prioritization of people’s interests over financial capital.

A new government will take office during difficult times, and pressing tasks await. Nevertheless, the state’s financial position is strong, and it is essential to use public finances to support a robust and effective welfare society. The Board of VR encourages both future government and opposition parties to join forces in promoting welfare and prosperity. The Icelandic society depends on it.

December 12, 2024
The Board of VR