Budget Bill: Further Softening of Cutbacks in Welfare

The state treasury’s expenses to welfare issues will increase by more than ISK 1 billion (USD 8.6 million, EUR 6.5 billion) in 2011 than stated in earlier plans.



The majority of the Althingi parliament’s Budget Committee completed their changes to the budget bill last night; the final round of discussions about the 2011 budget is on the parliament’s schedule today.

Among the changes is a contribution of ISK 350 million (USD 3 million, EUR 2.3 million) to price-increase compensation of the basic pension and disability benefits, Fréttabladid reports.

The rationalization demand for healthcare institutions will be softened by a few hundred million ISK. The healthcare institutions at Húsavík and Saudárkrókur, along with the Nature Medicine Association of Iceland in Hveragerdi will not have to make as significant cutbacks to their operations as earlier planned.

The amended bill also includes the increase of interest relief, which is based on an agreement between the government, financial institutions and pension funds on an action plan for indebted households. An additional ISK 6 billion (USD 52 million, EUR 39 million) will be spent on this issue, with financial institutions contributing to the cost.

The Budget Committee also agreed last night to commence vaccinations for cervical cancer in 12-year-old girls. ISK 50 million (USD 431,000, EUR 323,000) will be spent on the project next year and more in the coming years.

It is rare that a budget bill goes through such profound changes between the second and third rounds of discussions and, in fact, there are no other examples of changes being made to the budget bill before the final round of discussions.

The budget bill also went through significant changes between the first and second rounds of discussions. For example, cutbacks in expenses to healthcare were softened by ISK 1.3 billion and contributions to educational issues increased by more than ISK 500 million.

All day yesterday was spent on making the final version of the budget bill. Before the Budget Committee met, meetings were held in the parliamentary groups of both coalition parties.

Neither Lilja Mósesdóttir nor Atli Gíslason of the Left-Greens, both of whom had criticized the planned cutbacks, attended the party’s meeting.

Mósesdóttir abstained from voting on the budget bill after the second round of discussions last week. The Left-Greens do not expect her support in the final voting.

With the amendments made yesterday, the Budget Bill took criticism and remarks into consideration but did not take special consideration of the viewpoints of single MPs, neither Mósesdóttir nor other MPs.

Mósesdóttir’s decision to abstain from the budget bill voting raised considerable attention—this is the first case of a member of the coalition making such a move, ruv.is reports.

Prime Minister Jóhanna Sigurdardóttir commented that Mósesdóttir has to make up her mind as to whether she wants to side with the coalition or the opposition.

Mósesdóttir replied that she has not considered leaving the Left-Green Movement and that she doesn’t understand Sigurdardóttir’s comment.