Fiscal plan approved: “Good God almighty”

The government's fiscal plan for the years 2026–2030 has been approved by Alþingi with the support of the ruling coalition. A government MP described the plan as a "navigation chart" for the parliamentary term, while an opposition MP warned that the government is headed for shipwreck.

According to the majority report from the Budget Committee, the plan anticipates a 26 billion ISK deficit in 2026, a 1 billion deficit in 2027, a 2.9 billion surplus in 2028, a 9.1 billion surplus in 2029, and a 20.8 billion surplus in 2030.

When the plan was introduced in April, the government stated that the national budget would be run without a deficit from 2027 onward. Prime Minister Kristrún Frostadóttir has said the government will try to find the missing billion to ensure a balanced budget in 2027.

"A navigation chart for the term"

Dagur B. Eggertsson, deputy chair of the Budget Committee, welcomed the plan.

“I welcome the fiscal plan of Kristrún Frostadóttir’s government. It is progressive. It emphasizes infrastructure investment and social issues. It improves the conditions of the elderly and disabled. It advances healthcare and takes the whole country into account. This is a good navigation chart for the term,” said Eggertsson.

Guðlaugur Þór Þórðarson, MP for the Independence Party and a member of the Budget Committee, has been sharply critical of the plan. He responded to Eggertsson on the floor of Parliament, saying:

“It is deeply concerning that this is the government’s navigation chart for the term. That means we are heading for a shipwreck. It’s absolutely clear—based on the comments from the Fiscal Council—that this plan involves significant tax increases, which we will of course fight against,” Þórðarson said.

“Not one stone left upon another”

Þórðarson argued that the plan violates the Public Finance Act and fails to account for substantial expected expenditures.

In a recent interview with Morgunblaðið , Þórðarson pointed out that the government’s policy of allocating 1.5% of GDP to defense and security within ten years is not included in the plan—expenses amounting to tens of billions.

“Not one stone is left upon another. This fiscal plan is already obsolete. I look forward to working in the honorable Budget Committee. But good God almighty, these working methods are beneath contempt, and the government’s priorities, unfortunately, are on full display here,” said Þórðarson when explaining his vote in Parliament.