2012 national budget approved by Icelandic parliament

Next year’s national budget bill has been approved by Iceland’s Alþingi parliament after a marathon voting session.

The parliamentary voting went on for three hours as MPs continued to wrangle over specific details. The country’s Minister of Finance said that negative economic forecasts for post-crash Iceland were wrong and that next year’s budget bill reflects one of the biggest economic recoveries in any Western country, RÚV reports.

Despite being hailed as surprisingly painless by government parties, the budget bill is still marked by cutbacks and tax rises — something which opposition parties criticised strongly.

Kristján Þór Júlíusson, the Independence Party representative on the Alþingi Finance Committee told parliamentarians that with the budget bill the government is not keeping its promises and that the bill taxes and cuts down instead of conserving and building up.

In the final vote on the finished bill, 31 MPs voted in favour, three voted against and 23 abstained. Six members did not vote or were not present. The annual budget bill is unique in Iceland because all parties agree it has to be passed and enacted in December and the final vote is usually massively in favour; but that belies the months of argument and the dozens of votes on individual matters which lead up to the final bill. MPs are expected to vote along party lines when debating the budget and as a result all opposition propositions were rejected this year — although some by a tiny margin.

Opposition parties decided to take the finance minister’s words literally, saying that if there really are brighter times round the corner then the budget should start increasing funding and easing the tax burden right away. The opposition parties say, on the other hand, that the bill reeks of broken promises and that the ‘Nordic welfare government’ is attacking its beloved Nordic welfare system full force. Independence Party leader Bjarni Benediktsson said that the bill leaves no hope for brighter times.

In retort the chairman of the parliamentary finance committee, Sigríður Ingibjörg Ingadóttir, said that the bill shows the governing parties’ continuing determination to make the best of a difficult situation.

Minister of Finance Steingrímur J. Sigfússon applauded his government’s strict finances and its ISK 20 billion turnaround, saying that the treasury will be in surplus again next year for the first time since the crash. “We are in a tiny group of OECD countries reporting these sort of figures in our budget right now,” he said.