New Kilometre Tax Proposed for Petrol and Diesel Vehicles

A car driving in the North Icelandic countryside.

The Ministry of Finance and Economic Affairs has announced plans to introduce a kilometre tax for gasoline and diesel vehicles. This tax was applied to electric, plug-in hybrid, and hydrogen vehicles at the beginning of the year. The kilometre tax is intended to replace the current taxes on oil and gasoline, which are paid when purchasing fossil fuels. The planned tax would eliminate current oil and gasoline taxes. Read the proposed legislation here.

Adjusted by weight

The bill is planned to be presented before Alþingi this coming fall. Should it pass, it would take effect January 1, 2025. The bill proposes a kilometre tax based on the number of kilometres driven, adjusted for vehicle weight, regardless of the vehicle category.

Key points of the proposal include a fixed rate per kilometre for vehicles with a permitted total weight of 3,500 kg or less, as these vehicles generally cause similar road wear. For vehicles exceeding 3,500 kg, the tax amount will be based on total weight using a specific weight factor calculation. The tax will increase with the vehicle’s weight, reflecting the greater impact heavy vehicles have on road wear compared to lighter ones. This weight-based kilometre tax is intended to reflect the actual road use and weight of the vehicle.

Incentive to transition to renewable energy

The kilometre  tax will replace the current petrol and diesel taxes, which are paid when purchasing fossil fuels.

The tax will be paid based on an estimate of average monthly mileage and settled when the new odometer reading is recorded by an accredited inspection agency. The collection method will be similar to how utility companies bill for energy use.

If passed, the new system claims to ensure a continued financial incentive for the transition to renewable energy, as the new tax schedule would mean that the energy and maintenance costs for electric vehicles will remain significantly lower than those for fossil fuel-powered vehicles.

 

OECD Survey Shows Decreasing Trust in Public Institutions

Miðborg Reykjavíkur - tekið úr byggingakrana

According to a recent OECD Trust Survey, in 2023, 36% of Icelanders reported high or moderately high trust in their national government, which is below the OECD average of 39%. This figure marks a 14 percentage point drop since 2021, the third largest decrease among OECD countries with available data.

Initiated in 2021, the OECD Survey on Drivers of Trust in Public Institutions explores the public perception of institutions and government across 30 OECD nations. The survey takes into account both day-to-day interactions with administrative systems, in addition to trust in government to make complex policy decisions. Read the full report here.

Other people trusted most, political parties trusted least

Similar to most OECD countries, Icelanders trust other people (82%) and the police (73%) more than their national government (36%). Over half of the population has high or moderately high trust in the national civil service (64%) and news media (62%). The national parliament (36%) and political parties (20%) are the least trusted institutions in Iceland.

The survey also revealed that in Iceland, people who feel excluded from the political system trust the national government 42 percentage points less than those who feel included, a smaller gap than the OECD average of 47 points. Notably, Iceland is one of three countries where women (37%) trust the national government slightly more than men (36%), unlike the OECD average where women’s trust is 7 points lower than men’s. Trust in the national government is equal among younger and older Icelanders, while across the OECD, older people’s trust is 7 points higher. Trust gaps related to education and financial concerns in Iceland mirror the OECD average.

Large gap between day-to-day institutions and government

The survey showed further that Icelanders, for the most part, trust the institutions they interact with daily, such as the civil service. For most day-to-day interactions with administration, Icelanders showed satisfaction generally higher than OECD averages. A large majority of people in Iceland (66%) with recent experience with the education system are satisfied with it, compared to 57% on average across the OECD. Additionally, 66% are satisfied with the administrative services they used, which is equal to OECD averages.

However, the general satisfaction with daily administration contrasted sharply with larger questions of policy and accountability. Indeed, the survey indicated that Iceland scores below the OECD average on nearly all indicators related to decision-making on intricate policy matters. A third of people in Iceland (34%) expect that government balances interests of current and future generations, a share that is 3 percentage points lower than the average across OECD countries (37%). Strikingly, only 20% of those surveyed found that parliament held government accountable. This is significantly lower than the OECD average of 38%.

 

Deportation of Disabled Palestinian Boy Postponed

Protest against 11-year-old Yazan Tamimi's deportation, June 23, 2024

The deportation of an 11-year-old Palestinian boy and his parents has been postponed by one month, until early August. The boy, named Yazan Tamimi, has Duchenne muscular dystrophy and uses a wheelchair. The boy’s mother, Feryal Tamimi, told RÚV they don’t know why the decision was made and are still worried about the future.

Deportation considered life-threatening

Yazan and his family arrived in Iceland around one year ago, from Palestine. They travelled to Iceland through Spain, where their passports were stamped. Icelandic authorities aim to deport the family to Spain, where they have not previously resided, with the support of the Dublin Regulation. They were set to deport him and his parents from Iceland in early July but have postponed the action by at least four weeks.

Yazan has a severe form of muscular dystrophy called Duchenne and uses a wheelchair due to the effects of the illness. Duchenne experts in Iceland have stated that deportation could significantly shorten his life and be life-threatening for him, both due to the risk of travel itself and because it will interrupt his necessary treatment for up to 18 months.

Breaches Iceland’s international commitments

Locals in Iceland have held regular protests in support of Yazan, calling on Icelandic authorities to reverse their decision and let the family stay. Now new details have emerged in their case, acccording to the family’s lawyer, Albert Björn Lúðvígsson, who is trying to get the Immigration Appeals Board to reconsider the case. He states that regulations were not followed in how Yazan’s disability was evaluated, and that the evaluation was not in line with the UN Convention on the Rights of Persons with Disabilities.

Poll Shows Majority of Icelanders Want EU Referendum

Danish Embassy

A recent poll from market research company Maskína indicates that a significant majority of the nation is in favour of a referendum on EU membership next election. Vísir reports.

Maskína conducted the poll between June 12 and 20. Of the respondents, 54.3% were in favour of Iceland joining the EU. Additionally, a significant majority, 74.2% of respondents, considered it important for a referendum to held on further negotiations on EU membership.

Decisive results

In an interview with Vísir, former Prime Minister Þorsteinn Pálsson called the results decisive, but not surprising.

“[The results make] it clear, in my opinion, that this issue can no longer be kept off the political agenda,” he stated.

“Of course, no one knows in advance what the outcome will be, but it is crucial that the next government, which will have to undertake substantial reconstruction efforts and set a new course for Iceland, knows from day one where the voters stand on this significant issue,” Þorsteinn said to Vísir. “This is a question of equal opportunities, that everyone should take this step. People also see in Britain that Brexit was to blow up the European Union but ultimately blew up the British Resistance Party. The European Union has never been stronger and the economy in the UK and British homes will be poorer because they left.”

Read more: The Króna and the Euro

The recent poll additionally showed that 66.8% of respondents believed that households would be better off under the EU. A significant factor at play is of course the Icelandic króna, one of the smallest currencies in the world. If Iceland were to join the EU fully, it could also mean adoption of the Euro. Adopting the Euro could mean, among other things, that Icelandic homeowners would have access to mortgages at more favourable rates. Notably, many Icelandic businesses already choose to keep their books in Euro, given its stability and more favourable loans.

Parliamentary elections are scheduled for next year.

New Online Resource Supports Icelandic Children of Divorce

school children

Icelandic children aged 3 to 17 with divorced parents now have access to an online resource, SES for Children, to learn about divorce and its impact. The programme, which includes 28 courses, aims to help children cope with the consequences of divorce and is the first of its kind to be offered nationwide.

First to offer nationwide access

Icelandic children aged 3 to 17 with divorced parents now have access to a new online resource to learn about divorce and its impact on their lives and emotions, Vísir reports. The programme offers 28 online courses tailored to different age groups and themes, covering topics such as grief, blended families, how to react when parents argue, emotions, and children’s rights.

Previously available only to adults, the programme, SES (Samvinna eftir skilnað, or Cooperation After Divorce in English), now has around 2,000 adult users in Iceland. It was launched in 2020 and, as noted on the government’s website, has proportionally the most users compared to both the Danish and Swedish websites.

The children’s version, developed similarly by child and family psychologists in collaboration with the University of Copenhagen, is entitled SES for Children. Last week, the Minister of Education and Children’s Affairs, Ásmundur Einar Daðason signed an agreement to introduce SES for Children and extend the programme for adults.

As noted by Vísir, Iceland is the first country to offer this service nationwide.

Clear demand for a children’s version

Sören Sander, one of the project’s developers in Copenhagen, has researched divorce and its effects on families for years. In an interview with Vísir published today, Sander noted that since the adult programme’s inception, there has been a clear demand for similar resources for children. 

SES for Children is already offered in 22 municipalities in Denmark and 11 in Sweden, with Iceland being the first to offer it nationwide: “This programme has been implemented and used elsewhere, with ten thousand children already benefiting from it. It has been tested and proven effective,” Sander stated, adding that parents’ feedback had been overwhelmingly positive.

“We are often asked if there is something similar for children. Most parents are happy to have a tool that can help them open difficult conversations with their kids. This new resource bridges the communication gap between parents and children regarding the changes in the family during divorce,” Sander explained, adding that he believes Iceland is an ideal place to launch the programme due to its small size and the positive reception from adults. 

In June, there were 2,075 adult users in Iceland. Six to seven hundred divorces are recorded in Iceland annually, Vísir notes.

Empowering children

As noted by Vísir, the programme is for children who have not only experienced their parents’ or guardians’ divorce but also for those who went through it years ago and now live in new family setups with stepparents and stepsiblings. It is for the entire family: before, during, and after the divorce. 

Sander emphasises that the programme is a good conversational tool that empowers children without burdening them with responsibility.

“It empowers them to speak up when their parents aren’t communicating or are speaking poorly about each other. Children have little power in these situations and find it distressing to see their parents argue,” Sander observed. As noted by Vísir, one module teaches children how to intervene without escalating conflicts.

“It could be a birthday or a confirmation, or even when the child grows up and gets married,” Sander explained. “These major family events can be sources of conflict. Our toolkit includes a checklist for handling such situations and questions for parents to consider. Should there be one party or two? Should they buy a gift together? Should they invite new partners and both families? Who pays for what? These seemingly simple questions often cause significant disagreements.”

Sander further noted that in such cases, parents sometimes ask the child what they want, which can create a loyalty conflict. “But that places the responsibility on the child and can create a loyalty dilemma,” Sander explained. One module teaches children to tell their parents politely that they don’t want to choose.”

“The child can say, ‘I choose not to have an opinion on this. You have to decide.’ This helps children stay out of conflicts and lets parents find a solution,” Sander observed. The programme addresses one problem from multiple angles.

“I think Iceland can be a model for other countries,” Sander added.

No waitlist

As noted by Vísir, the SES website is still in development. All courses are available, but some are still in Danish and awaiting translation (they will be replaced as soon as translations are ready). The content is accessible online, so it can be viewed anytime.

“There is no waitlist,” Sander clarified. “We know that men are less likely than women to seek help. Also, people in small communities may hesitate to seek help locally. It’s a big advantage for those people to be able to seek help online.” 

“Our hope is that this will be useful for children and their parents and will even encourage them to talk about it with others. It’s normal to find it difficult, but it helps to not feel alone. It’s easier to ask for help when you have the vocabulary and a common language. Children often don’t realise their distress is due to their parents’ divorce. This programme helps them understand the root of their problems and that they are not alone,” Sander concluded.

Prudent to Reinforce Barriers for Anticipated Eruption

Protective barrriers in Reykjanes

A volcanologist anticipates a potential summer eruption in Sundhnúksgígar to be similar to past events, Mbl.is reports, although increased lava mounds will likely complicate magma flow predictions. The Icelandic Meteorological Office reports a quicker land uplift rate in the area, suggesting a likely eruption in the coming weeks or months.

Similar to previous eruptions

If another eruption occurs this summer in the Sundhnúkar crater row, volcanologist Haraldur Sigurðsson expects it to be similar to previous ones.

In an interview with Mbl.is published yesterday, Haraldur noted that the lava mound in the Sundhnúksgígar area has increased, making it more challenging to control the flow of magma and predict its direction. For instance, protecting areas near the Blue Lagoon and Grindavík could become more complex.

“However, significant work is being done on these defensive barriers,” Haraldur added. “If the eruption follows the same direction along the fissure, it should be manageable, but I think it’s wise to continue reinforcing the barriers and be prepared for anything, especially around the Blue Lagoon.”

When asked to comment further about the lava mound, Sigurður explained that the lava has built up with each eruption. “Each time lava emerges, that point rises by 5 to 10 metres, or at least several metres repeatedly. It’s the bulge on this ‘turtle’. The turtle’s shell has become quite tall, affecting the flow of lava and making it harder to predict the direction,” he explained.

Quickening land uplift

As noted on the website of the Icelandic Meteorological Office, the rate of land uplift in Sundhnúksgígar is currently proceeding at a quicker speed than before the May 29 eruption and is similar to the rate at the beginning of the year.

“A model based on deformation data shows that the magma inflow into the magma chamber beneath Svartsengi is now 4-6 m3/s. At the start of the magma intrusion and the subsequent May 29 eruption, it is estimated that about 13-19 million m3 of magma exited the chamber. Model calculations indicate that at the current inflow rate, the magma chamber beneath Svartsengi will reach a similar state to before the May 29 eruption within three to six weeks.”

The MET Office noted that, as of yesterday, it is likely that a magma intrusion or eruption will occur in the coming weeks and months.

A brief note on safety

It is important to note that the eruptions on the Reykjanes peninsula over the past three years have been highly localised, with minimal effect on air travel and travel in general.

For more information on tourist safety on the Reykjanes peninsula, see our recent In Focus Article.

“With four eruptions in the Sundhnúkagígar crater system during this spell, it’s no wonder that prospective tourists have been asking themselves if it’s still safe to visit Iceland. The short answer is ‘yes, absolutely.’ The long answer is ‘yes, but use common sense!’”

Governing Coalition Least Popular Since Banking Collapse

Alþingishúsið

The latest numbers from Gallup show declining support for the current coalition, with numbers never lower since Geir Haarde’s government which presided over the banking collapse.

According to the latest numbers, the Social Democratic Alliance and the Progressive Party have lost the most support, while the Reform Party and the People’s Party have gained the most. Despite its losses, the Social Democratic Alliance still sees the highest level of support.

Read more: Support for Independence Party at Record Low

According to Gallup, support for the Social Democratic Alliance would decrease by a total of 3% if an election were held today. The last poll numbers showed support hovering around 30%, but the new level of 27% would mean 19 MPs. As stated however, the Social Democratic Alliance remains the most popular at the moment.

The Progressive Party has also seen a significant drop, from 9.9% support to 6.6%. If an election were held today, the party would get 4 MPs.

The Independence Party measured at 18.5%, translating to 13 MPs.

gallup poll july 2024
gallup.is

Read more: Waning Support for Left-Greens

The parties that gain the most from the recent poll are the Reform Party and the People’s Party, both parties seeing an increase of around 2%. Currently, the Reform Party polls at 9.4% and the People’s Party at 7.4%. If an election were held today, the Reform Party would take six MPs, and the People’s Party five.

The Centre Party gained one per cent, increasing from 13.5% to 14.5%, and would get 10 MPs.

The Pirate Party continues to have 8.8% support and would get 6 MPs.

The Left-Green Movement has marginally recovered from its recent low, moving from 3.3% to 4.0%. However, based on these numbers, if an election were held today the party, which is currently in the governing coalition, would not pass the 5% threshold for parliamentary representation.

The recent poll also shows 28% support for the current coalition, a record low since the banking collapse.

The data is based on a representative sample from Gallup’s Opinion Panel, selected randomly from Registers Iceland to reflect the demographics of the Icelandic population.

Repeated Calls to Government to Stop Deportation of Disabled Child

Protest against 11-year-old Yazan Tamimi's deportation, June 23, 2024

Another protest was held yesterday imploring the immigration authorities to reverse its decision to deport Yazan Tamimi, an 11-year-old Palestinian boy with Duchenne muscular dystrophy, and his family back to Spain. Numerous disabled rights have echoed these sentiments, stating that to deport him would be detrimental to his health, and a violation of international treaties.

A year in Iceland

Yazan came to Iceland with his family about a year ago, via Spain. The Directorate of Immigration is essentially deporting the family for this reason; the Dublin Regulation gives signatory countries the right – although, importantly, not the obligation – to send asylum seekers back to their previous point of departure.

The disability rights and childrens’ rights groups Þroskahjálp, the Duchennes Society of Iceland, Unique Children in Iceland and Rights of Refugee Children have all issued statements in support of Yazan. Þroskahjálp in particular issued a statement pointing out that Iceland is a signatory country to both the UN Convention on the Rights of Persons with Disabilities and The UN Convention on the Rights of the Child, both of which arguably supersede the Dublin Regulation.

An incurable illness

Duchenne muscular dystrophy is a severe form of muscular dystrophy, particularly targeting boys, with most children needing to use a wheelchair by age 12. Yazan already uses a wheelchair. There is no known cure, with most people afflicted by it having a life expectancy of around 25 years. There are, however, treatments available that can help alleviate its symptoms and improve quality of life, and those treatments are available in Iceland.

The family has no ties to Spain, has never lived there, and if they are deported there, it is uncertain how they would be able to manage. Guðjón Reykdal Óskarsson, the leading Icelandic doctor on Duchenne, recently told RÚV: “I find it strange that doctors at the Directorate of Immigration say that this is not a serious illness. If you have gone through medical school, and I have gone through pharmacology and genetics, every single textbook names this illness as particularly serious. When I heard he would be deported I was filled with fear.”

Government Authorises Barrier Enhancements Near Grindavík

Reykjanes peninsula

The Minister of Justice has authorised raising and strengthening protective barriers around Grindavík to prevent damage from natural disasters related to volcanic activity. The total projected cost of these enhancements is nearly ISK 7 billion [$50 million/€47 million], including recent additions and reinforcements near the Svartsengi power station.

Raising and strengthening barriers

The Minister of Justice Guðrún Hafsteinsdóttir recently authorised the National Commissioner of the Police to begin work on raising and strengthening protective barriers around the town of Grindavík on the Reykjanes peninsula. As noted in an announcement on the government’s website, the aim is to “prevent damage to critical infrastructure and other structures of public interests from natural disasters associated with the volcanic systems on the Reykjanes Peninsula.”

Lava breaches protective barrier

As previously reported on IR, lava breached the protective barrier near the Svartsengi power station, not far from Grindavík, on June 18. Firefighters responded by using water from fire trucks to halt the lava flow. They also experimented with cooling machinery but encountered issues relating to water pressure.

The announcement goes on to note that lava cooling has now been applied at four locations in Svartsengi, and according to the Department of Civil Protection and Emergency Management, “significant lessons have been learned from the lava cooling operations, and the initial objectives were achieved.” Given this recent breach of lava, the Justice Minister believes that it is important to continue raising the protective barriers.

Total projected costs ca. ISK 7 billion

As noted on the government’s website, the National Commissioner of Police recommended to the Minister of Justice in early June that the barriers at Svartsengi be raised as soon as possible. Following this recommendation, the Minister of Justice decided to enhance the barrier. The estimated additional cost is around ISK 300 million [$2.2 million/€2 million].

Read More: Wall of Fire (On the Construction of Lava Barriers Near Svartsengi)

According to information from the National Commissioner of Police, the total cost of the construction was initially estimated at around ISK 6 billion [$43 million/€40 million] but is now projected to be nearly ISK 7 billion [$50 million/€47 million] with all the additions.

“This cost includes the aforementioned raises and reinforcements, the inner barrier near the power plant, and various adjustments due to road connections and environmental considerations at the project’s completion.”

Support for Independence Party Hits Record Low in New Poll

bjarni benediktsson

The latest Maskína survey shows the Independence Party’s support at a historic low of 14.7%, while the governing coalition’s combined support is at 30%. Prime Minister Bjarni Benediktsson, though concerned, has no plans to step down ahead of the September 2025 elections.

An historic low

The monthly nationwide Maskína survey on party support was published yesterday. As noted on Maskína’s website, the results reveal “a bleaker outlook for the governing coalition parties than previously seen,” with their combined support measured at 30%.

Support for the Independence Party was 14.7% in June, marking its lowest point ever recorded by Maskína. Meanwhile, support for the Social Democratic Alliance remained steady at approximately 27%, with a significant difference between these two parties being consistent for 16 consecutive months.

As the Independence Party’s support declines, the Centre Party is gaining momentum, with only a two percentage point gap between the two parties.

“No specific explanation”

In an interview with RÚV yesterday, Prime Minister Bjarni Benediktsson, who is also the leader of the Independence Party, did not offer any explanations for the party’s poor performance:

“I don’t know any specific explanations for this particular survey; they can vary, and one must also consider the margin of error. But of course, we are not satisfied with such measurements and need to think about how we can lift ourselves again before the elections.”

Are you considering stepping down in light of these surveys?

“No, I am not.”

The next parliamentary elections in Iceland will, all things being equal, take place in September 2025.