Government Coalition Platform

Platform of the Coalition Government formed by the Progressive Party and the Independence Party


The formation of this government of the Progressive Party and the Independence Party begins a new advance for the country and its people. The government's prime concerns are to improve the situation of households in Iceland and to strengthen business and industry, with greater value creation for the common good.

The government will seek to mobilise the strength of national unity and overcome the antagonism and suspicion which has characterised Icelandic politics and public debate for some time. Progress and an improved standard of living in Iceland depend on cooperation and cohesion, and in the years to come Icelanders will continue to jointly resolve the nation's main challenges co-operatively.

Through its actions the government also intends to eliminate the political uncertainty which has been too conspicuous in Iceland in recent years. Efforts will be directed at achieving a broad reconciliation with the social partners on labour market developments and future investment. It is a prerequisite for Iceland to enter a new era of growth and stability that its economy enjoy trust once more both at home and abroad. This reinforces the foundation of welfare and creates the conditions for improved household economy.

A society is a co-operative effort, in which all jobs are significant and reinforce one another. It is important to care for those persons in need of support, while at the same time ensuring that people enjoy the benefits of their efforts and creativity. Seniors should enjoy security and well-being, and everyone should be assured a share of the value which Iceland and Icelanders create.

Through its actions the government will enable Icelanders to utilise the numerous opportunities open to them, to the benefit of the entire nation.

Efforts will be made to ensure equality of all citizens, regardless of their individual characteristics and status in other respects, such as residence, and encourage in citizens those virtues which can optimally ensure success and equality.

Improved public health and preventive measures will be among the government's priorities.

Iceland should be a family-friendly country, where children are secure and have equal opportunities to enjoy their statutory rights, just as other citizens. The government's policy shall encourage younger generations to believe in the future of the country and its people, and acquire the knowledge and urge for progress which form the basis for long-term prosperity.

Icelandic culture will be placed in the forefront, encouraged and strengthened. Emphasis will be placed on promoting the Icelandic language, protecting the country's heritage and recording, researching and presenting its history. The government will endeavour to increase respect for the country's remarkable history, culture and language, both at home and abroad.

The government emphasises the social importance of non-governmental organisations and volunteer work, and will facilitate such activities. The authorities should recognise to greater extent in their actions the importance of organisations such as search-and-rescue teams, local youth organisations, sports clubs, preventive and support organisations and other NGOs, which support and enrich Icelandic society.

The government will work to make Iceland among the leaders in environmental affairs worldwide, to serve as a model to other nations in environmental protection.  Due to its unspoiled nature and sustainable utilisation of renewable resources, Iceland enjoys a unique position in environmental terms. This image in itself is a valuable resource. Efforts will be directed at reinforcing this image and its foundation, on protecting Icelandic nature and boosting land reclamation and forestry where appropriate.

The government regards it as important to improve the appearance of the man-made environment in towns and cities. Laws will be adopted on special protected areas in settlements, similar to practices throughout Europe and North America. The objective is to protect historical milieux. Developments will be designed to reinforce the overall appearance of a protected area, in accordance with its original characteristics, thereby increasing its cultural significance and attractiveness.

The government emphasises access by the public to public data. It is especially urgent to increase and improve access to information on disposition of public funds.

Emphasis will be placed on the service function of state institutions, as public authorities should always operate for the public good.

The government emphasises:


Households form the basis and driving force of a society.

Through specifically directed actions, the government will address the debt problem of Icelandic households, which has resulted from the unforeseeable increase in the principal of inflation-indexed loans as a result of the financial system collapse. The basic criterion is to achieve a correction to the results of the inflation spike of 2007-2010; to this end both a direct write-down of the loan principal and fiscal actions can be applied. This will be an across-the-board action, regardless of when the loan was taken out, with emphasis on equal treatment. Limits may be applied to the highest loans and other conditions set to ensure equality in implementation and the efficacy of remedies.

In view of the increase in inflation-indexed debt and drop in asset prices, in part due to the impact of insolvencies of financial undertakings and their high appetite for risk prior to the financial collapse, it is appropriate to take advantage of the leeway which in all probability will develop in tandem with settlement of the insolvent estates, to address the needs of borrowers and persons who placed their savings in their homes, just as the emergency legislation ensured that the assets of the insolvent estates would be utilised to protect monetary assets and resurrect domestic banking activities. The government is keeping the option open of establishing a special adjustment fund to achieve its objectives.

It is desirable to take advantage of the opportunity available in tandem with debt adjustment to convert as many inflation-indexed loans as possible to non-indexed loans. The reduction of the principal will then prevent monthly debt service from increasing substantially, even if loans are paid off more quickly. Doing so can also mitigate the expansionary effect of the adjustment and reinforce the basis of monetary policy, which is a key aspect of removing controls.

Among the first tasks of the new government will be the appointment of an expert committee on eliminating indexation of consumer lending and restructuring the housing mortgage market, which will deliver a report before the end of this year.

Efforts will be directed at ensuring court cases and other disputes concerning household and corporate debt are resolved as rapidly as possible. Uncertainty as to the position of borrowers towards credit institutions must be brought to an end.

Economic affairs

Responsible economic administration is a premise for welfare, a robust healthcare and educational system, law enforcement and other basic services. Discipline and balance in fiscal policy plays a key role in ensuring stability, lower interest rates and low inflation.

The Icelandic króna will be the currency in Iceland for the foreseeable future. A stronger foundation is needed for monetary policy through solid economic management based on current circumstances and economic cycles.

Reviewing the budget framework, taking into consideration the most recent information on the economic situation, is a priority task, together with setting of realistic objectives on overall fiscal balance. Specific efforts need to be directed at reducing Treasury debt relative to GDP.

The government emphasises creating the conditions for growth driven by increased exports and improved public- and private-sector productivity. Greater productivity in the public sector means funds can be utilised better and the basis of welfare services further reinforced.

Improved working practices in budgeting will be adopted, taking a longer-term perspective to respond to the Treasury's situation and ensure rational utilisation of revenues. In this connection four points will be emphasised: Firstly, a greater distinction must be made between domestic expenditures and those which exit the country; secondly, investment must be distinguished from expenditures; and thirdly and fourthly, assessment needs to be made of the long-term impact and overall impact of the budget respectively.

A task force will be appointed to examine state expenditures, with the aim of eoconomising and prioritising, and to boost the efficiency of state institutions.

Removal of restrictions on capital movements

One of the government's most important tasks will be to work on removing capital controls, as currency restrictions distort asset prices and reduce the nation's competitiveness.

The situation of the Icelandic economy must be analysed and a programme developed for removal of controls, having regard for the importance of the foreign currency balance for the nation and its inhabitants. It is especially important to secure a solid long-term framework for the foreign currency market and ensure that settlement of debts of failed financial undertakings does not threaten economic stability.


Taxes on individuals and enterprises support the necessary services for society as a whole. A stable and rational taxation system encourages individuals to utilise their energy and corporations to expand, create jobs and invest.

An assessment will be made of the taxation system and changes to the system in recent years, and proposals made for improvements with the aim of simplifying the tax system, broadening tax bases and reducing income-linkage and tax evasion.

Simplifying the tax system and introducing positive incentives will make business operations simpler and more efficient. Reducing taxes on income, goods and services can significantly improve real incomes; this will be developed in consultation with the social partners and having regard for other economic measures, such as the removal of currency controls.

It is important to increase production and create more jobs; to this end changes will be made to the corporate tax environment. The corporate tax system and operating environment need to be predictable, to facilitate budgeting and encourage investment.

The government will therefore seek to provide information on how taxes and the corporate legal framework will develop in the future.

During the electoral term the social security contribution will be reduced, the minimum municipal taxes abolished and the income tax system reviewed. Consumption taxes will be levelled and simplified and commodity taxes reviewed.

Employment and investment

Vibrant business and industry is the basis of growth and welfare. The government will make every effort to create a working environment to promote investment and create more jobs, not least in small and medium-size companies. Special emphasis will be placed on export-sector growth, innovation and utilisation of opportunities for future growth, in addition to ensuring equality before the law.

The government will initiate the review of business regulation, with the aim of simplifying it and increasing efficiency. The objective will be to cut red tape and streamline communications with public bodies, while at the same time keeping costs down.

A special objective is to prevent the introduction of any rules burdening the business environment without concurrently removing encumbrances of equal significance. By so doing the overall impact of regulation can be moved in a positive direction.

Efforts will be made to equalise competitive positions by combating serial incorporation, ensuring equal treatment in payment of public levies, preventing capital controls from distorting enterprises' competitive positions and preventing financial institutions from managing operating companies for a protracted period.

Travel industry

A long-term strategy is necessary for the travel industry in Iceland focusing on the development of infrastructure, marketing of the country and creation of valuable jobs in the sector.

Efforts will be directed at better utilisation of opportunities in cultural tourism and increasing year-round travel services. Possibilities will be examined of charging admission fees to develop tourist locations in response to the increased numbers of visitors to natural sites and to ensure sustainability.

Plans of the previous government to increase VAT on travel services will be cancelled.


The government emphasises continuing development of fishing and processing. The competitiveness of Icelandic fisheries can be further strengthened, not least through actions aimed at improving treatment of catch, increasing variety in processing products and utilising so-called by-products.

The development of the fisheries cluster will be encouraged by ensuring a favourable environment for the sector, introducing positive incentives into the regulatory framework and promoting product development and marketing actions. The government wishes to increase education and instruction in fisheries, both with regard to fishing and processing, and not least to take advantage of new projects in tandem with product development, innovation and marketing and sales efforts.

In the international arena, the focus will be on the sustainability of fisheries and the purity and quality of products.

It is important to foster conditions for renewal of the fishing fleet and facilities for onshore processing with a view to increased value creation and the interests and security of employees. The fisheries management system will be reviewed, in part with regard to its cost-efficiency, the security and compensation of fishermen and environmental protection. The intention is to increase the flexibility of the utilisation strategy without sacrificing responsible management and utilisation of fishing stocks.

The catch quota system will be the basis of fisheries management. The government wishes to increase consensus on the future organisation of the sector. Work will continue on proposals of the conciliation committee during the previous electoral term on replacing permanent quota allocations with contractual rights to utilise catch quotas. Such contracts will convey rights to renewal, provided the conditions laid down in the contracts are satisfied.

The social, regional and employment remedies provided for in the current fisheries management legislation will continue to be applied. These arrangements will be reviewed in consultation with the local authorities and fisheries organisations.

Legislation on fishing fees will be reviewed. The general fee must reflect performance in the overall sector, while the specific fee should be based as far as possible on the performance of individual undertakings.

The government will examine, in consultation with parties working in fisheries, the advantages of establishing a forum entrusted with the task of providing information on, promoting, and presenting the qualities and advantages of Icelandic fisheries. Consideration will be given, for instance, to Norwegian arrangements in this regard. Ways will be sought to increase the consultation and exchange of information between the Marine Research Institute, vessel operators and fishermen.


The government places great emphasis on innovation in all sectors. Productivity needs to be increased in Iceland; creating an environment to encourage innovation in existing enterprises, public operations and new undertakings is a premise for long-term growth.

To ensure optimal utilisation of funding for research and development, the government emphasises co-ordinating the operating base and operating environment of public institutions responsible for R&D.

Changes need to be made to tax legislation to enable parties working on research to stand on equal footing with foreign competitors and collaborators. By so doing universities, corporations and individuals can enjoy the fruits of their work in a similar manner as is customary elsewhere. Co-operation and synergies of companies need to be stimulated to undertake larger development tasks in individual sectors, in part by creating a cluster strategy, improving access of start-ups to equity capital and simplifying the support system.


The government regards agriculture as among the most important sectors for the future. Growing global demand for food creates opportunities for Icelandic agriculture, through possibilities for increased and more varied production. The government will enable Icelandic agriculture to take advantage of the opportunities facing the sector. With this in mind, it is urgent to examine how value creation can be increased and the potential of the country's rural areas optimally utilised.

To respond to growing demand for food and rising prices, a working group will be appointed to draft proposals as to how food production can be increased in Iceland and ensure that the benefits of increased demand and opening up of new markets will result in improving the situation of farmers. The working group will go over the entire legal framework of agriculture, food processing and land utilisation. Proposals will be drafted for the amendments to Acts and Regulations needed to achieve the objectives set. Innovation, marketing and sales issues will also be reviewed. The working group will seek to consult with representatives of those active in the sector.

The intention is to review agricultural production contracts, having regard to feed and food production.

Local authorities will be given support in deciding what areas should be devoted to agriculture and the legal framework on such interests improved.

Oil and gas

The government will, as far as possible, encourage the exploitation of potential oil and gas resources as soon as practicable, should these be discovered in sufficient quantity to make extraction feasible. To this end it will undertake preparatory work in connection with transport, accident prevention and rescue work, environmental protection, infrastructure, co-operation with neighbouring countries and regulatory issues, and establish a special state oil company.

The purpose of the company will be to administer licenses for oil and gas production and to lay the basis for ensuring that potential benefit from such production is utilised by society as a whole and on a long-term basis. Such measures can contribute to increasing knowledge of oil and gas exploration and production in Icelandic companies and public administration. Such knowledge is valuable whether or not production in Icelandic jurisdiction materialises or not.

Health and welfare

The Icelandic healthcare system must be competitive with that in neighbouring countries with regard to equipment, patient facilities and employees' working conditions. The government emphasises that Icelanders enjoy access to healthcare regardless of residence.

Efforts will be directed at increasing Icelanders' general quality of life by boosting preventive measures and public health efforts. Doing so can also reduce the direct and indirect long-term cost for the entire society. Furthermore, emphasis will be placed on accident prevention and education in connection with this.

It is important to strengthen primary healthcare and secure its position as the first point of contact with patients.

A comprehensive examination must be made of the advantages of using prescriptions to a greater extent, as a method of allocating funding and all ways sought to increase productivity while at the same time considering social aspects. Work will continue on developing and linking up electronic medical data on a nation-wide basis, bearing in mind the interests, security and quality of services to patients.

New laws on participation of patients in the cost of pharmaceuticals need to be examined and the Act on Health Insurance, No. 112/2008, must be fully implemented.

The premises of the National-University Hospital are unacceptable. Emphasis needs to be placed on maintenance and improvements to the current hospital buildings and equipment until a permanent solution is available.

The government emphasises that Icelanders should enjoy secure housing suitable to each individual's needs, and have a real choice as to their form of housing.

It is important to co-ordinate better pensioners' entitlement to payments from pension funds, on the one hand, and benefits from the social security system, on the other. By so doing, a greater consensus can be created concerning the interaction of these two systems.

The reduction to the supplementary employment and financial income allowed to recipients of old age and disability pensions without reducing their benefits, which came into force in 2009, will be repealed.

The government considers it important for seniors to enjoy equal and fair treatment in society and to ensure their active involvement. Flexibility in retirement and pension age needs to be encouraged. Existing proposals for changes to social security will be reassessed.

It is urgent to work on a long-term strategy for the healthcare system to ensure greater cost efficiency and stability in the system, with appropriate consultation with professional associations of healthcare workers and other stakeholders. Gate-keeping will be introduced in stages.

Education and culture

The government places strong emphasis on strengthening the education system, guided by the interests of students and the nation as a whole. Diversity in education is the key to a vital and creative society. Emphasis will be placed on consultation with stakeholders when decisions are taken by state authorities on the organisation of study and instruction.

Emphasis needs to be increased on vocational, technical, design and fine arts studies and the links strengthened between these fields and business and industry. A co-operation forum will be established of educational authorities, teachers and business stakeholders for the future vision and shaping of an educational strategy in these subjects. The government will counteract school leaving, in part, by reinforcing study and work counselling at both compulsory and secondary school levels.

The government places emphasis on introducing collaboration with educational stakeholders on developing the education system and increasing quality in education. The 10-point agreement of 2006 will serve as a model for this co-operation. Through this collaboration ways will also be sought to shorten university entrance study and increase the continuity between levels of education.

The government emphasises the importance of sports, leisure and youth activities and the integration of play and study wherever possible. Efforts should be made to offer as many as possible a suitable option, whether in sports, the arts, creative work or social activities. Such work helps individuals mature and has a strong preventive value.

Ways will be sought to facilitate children and youth in making their way in life, in both the long and short term, in part by emphasising social skills, anti-mobbing actions and financial literacy in compulsory and secondary schools.

The provisions of the agreement of the University of Iceland Centenary Fund, which was established in 2011 will be implemented with a broad consensus.

The government emphasises encouraging the creative sector and wants to make studies in the arts accessible and recognised in Iceland. An evaluation will be made of the working environment in the creative sector to enable it to flourish and expand.

Music should enjoy the same positive encouragement as film making, i.e. part of the cost of recording will be reimbursed.

The Icelandic language needs to be given support, research on language development strengthened and the status of Icelandic sign language reinforced.

Environmental affairs

The government emphasises that protection and utilisation of nature go hand in hand. Clean, renewable energy, agriculture in an unpolluted natural environment and sustainable fisheries offer major marketing opportunities, which can serve as the basis for increased exports and the country's strong image.

It is important to apply economic incentives to encourage green activities. Eco-friendly energy sources should be utilised even more extensively in transportation. A reduction in fossil fuel usage will be encouraged. It is urgent to reduce net greenhouse gas emissions, both by reducing direct anthropogenic emissions and by greatly increasing land reclamation, forestry and other improvements to vegetation and foliage. Iceland's nature is among its leading resources. The need for protection in each location needs to be assessed objectively, through broad collaboration where the policy is set out in a natural protection plan and with legislation on natural protection. Public rights to access to the countryside beyond cultivated areas should be extensive.

The Master Plan for protection and utilisation of energy resources will be reviewed based on the conclusions of the expert groups appointed by the project management.

Rural development

Efforts will be directed at integrating public programmes and drafting special regional programmes in collaboration with municipalities. In so doing the role of municipalities and local residents in each location will be increased in prioritising rural projects.

Emphasis will be placed on equalising residence options, and having all residents of Iceland enjoy the basic services which are demanded in a modern society.

The government will work on improving communications, emphasising connecting settlements outside the capital region. Reykjavík airport is a basic aspect of the country's transportation. In order for it to continue to perform the important service function which it has provided for the entire country, its future location in proximity to administrative and other services must be ensured.

It is evident that certain regions face greater difficulties than others. An evaluation needs to be made of these regions and proposals drafted as to how the challenges can be met.

It is important to encourage varied employment opportunities throughout Iceland, in part by spreading public sector employment, developing the telecommunications network, greatly expanding optical cable installations and improving electricity security.

The advantages of utilising methods and experience in the Nordic countries in supporting rural settlement, boosting value creation and investment and creating jobs in rural areas, for instance, through tax incentives need to be examined. General rural development measures not only strengthen the country's sparsely populated regions but also improve the situation of the Treasury and the entire nation.

Work will be directed at equalising electricity and heating costs.

Equal rights

The government will direct concerted efforts at achieving real equality for all. The government will reassess those methods which have been used in the campaign for gender equality, with the aim of improving achievements in equal rights and counteracting gender-based wage inequality.

The financial independence of individuals is the basis for equal rights. Concern must be given to ensuring financial independence regardless of marital status, especially with regard to taxation, pensions and disability issues.

Emphasis will be placed on ensuring parental equality. The financial and social situation of parents with visitation rights will be investigated, with regard to whether their involvement in the tax and benefit system needs to be adjusted for their participation in the raising of their children.

Constitutional affairs

Work will continue on revision of the constitution of the Republic of Iceland, based on a broad consensus and guided by professionalism. Emphasis will be placed on provisions on the national ownership of resources and on referenda on parliamentary legislation on the initiative of a substantial share of voters. In accordance with current constitutional arrangements, revision of the constitution will take place under the guidance of and on the responsibility of the Althingi, which will have regard for work done in recent years. Emphasis will be placed on transparency and informed debate, with the participation of the general public.

Interior affairs

The government emphasises reinforcing law enforcement. In this effort it will be guided by the conclusions of the committee on law enforcement which recently submitted proposals on prioritisation of tasks in the next few years. The police will be given increased authorisations for more effective actions to combat organised crime.

A long-term solution will be found for the helicopter fleet of the Icelandic Coast Guard, as this is a key aspect of public security.

The government emphasises continuing reinforcement of municipal level government and further consultation with municipalities on transfer of tasks to them.

The intention will be to introduce an intermediate level court in both civil and criminal procedure, and for the Supreme Court to operate as a single division.

Public administration

The government will increase efficiency in public administration, in part with changes to its structure, harmonisation of support services, merger of institutions and transfers between divisions in accordance with its emphases and priorities.

Emphasis will be placed on improving public administration and state services, in part by increasing co-operation between the state and municipalities, through e-government and implementing information technology in communications with citizens.

Foreign affairs

The principal objective of Icelandic foreign policy is to safeguard the interests of the country and its people internationally. It is a basic aspect in dealings between nations that international law be respected and nations resolve their disagreements peacefully. International cooperation is important to address the threats which respect neither frontiers nor international law.

Accession negotiations with the EU will be put on hold and an assessment made of the status of the negotiations and developments within the EU. The assessment will be submitted to the Althingi for discussion and presented to the nation. Accession negotiations will not be continued without a prior referendum.

The government will direct efforts toward making Iceland a leading force in the Arctic and an active participant in West Nordic co-operation. Preparations will begin to take advantage of opportunities created by the opening of Arctic sea routes and emphasis placed  on having projects related to this located in Iceland.

Iceland's policy in external trade will reflect the rapid changes occurring in global economies. Possibilities of increasing exports to regions where demand will grow strongly in coming years will be examined further and connections to the regions in question reinforced.

Emphasis will be placed on concluding additional free trade agreements, both bilaterally and through EFTA. Ways will be sought to fully utilise the possibilities offered by those free trade agreements to which Iceland is already a party.

Emphasis will be placed on development co-operation and strong participation in multilateral co-operation in sustainable utilisation of natural resources, especially through multilateral organisations  working in areas related  to UN university training programmes in Iceland. Furthermore, emergency and humanitarian assistance will be offered to peoples in need.

Laugarvatn, 22 May 2013

Sigmundur Davíð Gunnlaugsson Chairman of the Progressive Party   

Bjarni Benediktsson Chairman of the Independence Party