Hafnarfjörður to Pay Childcare Stipends to Parents, Increase Wages for Childminders

A woman walking two young children through the snow

Parents of children a year and older in the town of Hafnarfjörður may now apply to receive a monthly childcare stipend from the local government, mbl.is reports. These payments are equal to those made to professional childminders, or “day parents,” and are intended to allow parents stay at home with their children longer, therefore bridging the gap between when their parental leave ends, and preschool begins. The town has also approved higher hourly rates for day parents, as well as the establishment of a special fund that will provide grants for day parents who have been municipally employed for at least a year. The Hafnarfjörður town council approved the measures, effective retroactive to January 1, at its recent meeting.

In Focus: The Preschool System

Day parents are self-employed professionals who are licensed by, and receive work permits from, municipal authorities. These individuals care for children who are either too young to enter preschool, children who are still on the waitlist for a place in the overcrowded pre-k system, and/or children who simply need a smaller, more personalized environment. Licensed day parents generally look after small groups of young children in at-home settings.

In its announcement about the new measures, the Hafnarfjörður town council said it believes that new parents need a wider variety of practical solutions for childcare and is looking into such options as extending parental leave and creating more choice within the pre-k and day parent systems. The town, which has a population of just over 29,700 people, currently has just 26 licensed day parents.

Day parents ‘an important pillar of childcare system’

Hafnarfjörður appreciates that “day parents are an important pillar of the daycare system,” and the town hopes to recruit more qualified individuals to the profession. Day parents who have worked for Hafnarfjörður for a minimum of 12 months can now apply for a grant of ISK 300,000 [$2,105; €1,944]. Hourly wages for day parents will also increase from ISK 8,433 [$59; €55] to ISK 12,800 [$90; €83] an hour.

The council also seeks to better support low-income families and families with multiple young children. Low-income parents can apply for additional subsidies, for one, and ‘sibling discounts’ are available for siblings who go to the same day parent, preschool, or after-school program. The second child receives a 75% discount on fees and the third 100%.

Minister of Food Allocates ISK 584.6 Million from Food Fund

Svandís Svavarsdóttir

Svandís Svavarsdóttir, Minister of Food, Agriculture and Fisheries, has allocated ISK 584.6 million ($4.2 million /€4.1 million) from the Food Fund (Matvælasjóður). Fifty-eights projects, from 211 applications in total, received grants.

Among the projects that received grants:

– The development of delicacies from lamb and sheep riblets
– A marketing initiative for the export of Icelandic whiskey
– A project to maximise the productivity of home food growing systems for local vegetable production
– Potable supplements made from Icelandic algae
– A system of supervision and certification for Icelandic salt-fish products
– Protein manufacturing from Icelandic grass
– The development of flavouring products from algae for oriental food
– Foal jerky and raw sausages

“The creativity and daring that Icelandic food manufacturers possess is a reason for rejoicing and goes to show that Iceland is on the right course as a food manufacturer. It’s also great to see that the gender ratio is almost even,” Svandís stated.

Four separate funds

The Food Fund awards subsidies in four categories: Bára, Kelda, Afurð, and Fjársjóður.

Bára supports projects at the idea stage. Eligible grantees include companies that have been founded over the past five years, along with entrepreneurs that want to develop ideas, raw materials, or processes related to Icelandic food manufacture.

Kelda supports projects that aim to acquire knowledge in support of the fund’s aims of innovation, sustainability, value creation, and the competitiveness of Iceland as a food manufacturer.

Afurð supports projects that are beyond the idea phase but are not yet ready to go to market. Subsidies aim to afford grantees opportunities to develop products from raw materials created during the manufacturing process and that are conducive to the creation of value.

Fjársjóður supports projects that aim to support Iceland’s marketing infrastructure and that support marketing campaigns for products connected to Icelandic food manufacture.

As noted on the government’s website, the aim of the Food Fund is to support innovation in the field of food production and processing,whether agricultural or marine-product related. The fund emphasises innovation, sustainability, value-creation, and the competitiveness of Icelandic food products.

Additional Relief for Struggling Restaurants On the Way

The Icelandic government is promising additional relief subsidies for suffering businesses in the restaurant sector, RÚV reports. It is hoped that the measures—which include tax relief as well as extensions of existing subsidies—will be implemented within the next few days.

The announcement comes in the wake of tightened domestic restrictions as COVID cases soar in Iceland and authorities scramble to ensure that the health system does not become overwhelmed. As of midnight on Friday, the general gathering limit is now 10 people and bars and clubs will be closed. Events and performances will also not be permitted. The current regulations will be in effect until February 2.

See Also: Iceland Tightens Domestic COVID-19 Restrictions

Restaurant and bar owners have repeatedly requested stronger governmental support to help weather financial insecurities created by the pandemic. On Friday afternoon, the government announced that it intends to allow restaurants to postpone paying tax and social security contributions. Relief grants will be extended. These measures are expected to be implemented right after the weekend. Closure subsidies are also expected to be extended and special subsidies for restaurants in distress should also be available.

Þórdís Kolbrún Reykfjörð Gylfadóttir, who is acting Minister of Finance in the absence of Bjarni Benediktson, said that there isn’t much work left to be done on the proposal and she hopes that it will be on Monday’s parliamentary agenda. She noted that the relief measures come as a result of conversations with people in the events, tourism, restaurant, and cultural sectors.

“What we’re doing right now is primarily focused on restaurants,” she stated. “[…] But we need to be mindful of the economy as a whole remaining strong. As such, we need to be smart about directing this targeted support to those who really need it.” Þórdís Kolbrún estimated that the government would spend over ISK 1 billion [$7.78 million] on these measures.

Additional Government Aid for Businesses and Artists

Katrín Jakobsdóttir forsætisráðherra

Prime Minister Katrín Jakobsdóttir says the government is working on further relief measures for companies and artists who are suffering financially because of the COVID-19 pandemic, Vísir reports. On Friday, the government agreed to extend and increase subsidies to companies that have had to close due because of stricter virus control regulations.

See Also: COVID-19 in Iceland: Stricter Measures Take Effect in Reykjavík Area

Capital-area businesses such as gyms, bars, nightclubs, hairdressers, and tattoo studios have had to close as authorities attempt to get a recent spike in COVID infections back under control. Per the government’s decision on Friday, businesses will receive ISK 600,000 [$4,352; €3,678] for each employee, every month they have to remain closed. Katrín says this is in response to criticism of the government’s previous COVID subsidies, which primarily benefited small businesses. This new initiative would also benefit large companies as well.

See Also: Moment of (Radio) Silence for Self-Employed Musicians

Katrín estimates that if businesses have to remain closed for a month, the initiative could cost the government somewhere in the range of ISK 3-400 million [$2.22.9 million; €1.8-2.5 million]. Tourism-dependent companies obviously make up a large proportion of those that are currently suffering due to reduced international travel and closures. However, Katrín says that the government is also preparing relief packages for musicians and performing artists, the terms of which will be clarified later in the month.

Iceland Launches Subsidised Flights for Countryside Residents

Loftbrú subsidised flights

Residents of Iceland who live far from Reykjavík can now book subsidised flights to the capital three times a year. Transport Minister Sigurður Ingi Jóhannssón launched the initiative at a press conference in Egilsstaðir, East Iceland this afternoon. The project, called Loftbrú (Eng: Air Bridge), is intended to make services in the capital area more accessible to residents of the countryside.

Loftbrú is based on a similar initiative in Scotland ensuring affordable transportation to and from that country’s islands and highlands. Loftbrú applies to all registered residents of the Westfjords, Northeast Iceland, East Iceland, Hornafjörður (Southeast Iceland), the Westman Islands, and parts of Northwest Iceland. The subsidy covers 40% of the cost of scheduled flights to and from Reykjavík, regardless of whether they are full price or discounted. Each individual is eligible for up to three trips (six flights) per year through the initiative – though just one for the remainder of 2020.

Air Iceland Connect’s booking engine gives a good sense of the cost of domestic flights in Iceland. A return trip between Egilsstaðir and Reykjavík September 11-18, 2020 with one checked bag adds up to ISK 44,325 ($315/€267) for a single traveller. With the Loftbrú subsidy, the cost lowers to ISK 26,595 ($189/€160).

The subsidies are available to residents through island.is, the government’s official electronic services portal. Loftbrú is working on offering the same subsidy to students from the countryside temporarily residing in the capital area. That initiative is expected to be launched by the end of the year.

Loftbrú is expected to cost Iceland’s government ISK 600 million ($4.3m/€3.6m) per year, and ISK 200 million ($1.4m/€1.2m) in 2020. Funding to the project was allocated in the government’s transportation plan that was approved in June 2020.

Proposal to Make Domestic Flights Part of Public Transportation

Air Iceland Connect

Domestic Icelandic flights should become part of Iceland’s public transportation system and be subsidised by the state, says Independence Party MP Vilhjálmur Árnason. RÚV reports that Vilhjálmur would like to see domestic flights receive government funding, the same way that municipal buses and ferries currently do.

The current state of the domestic flight industry was discussed by Alþingi’s Environment and Transport Committee, which met at Vilhjálmur’s request on Thursday morning. Iceland’s leading domestic airlines have been curtailing their operations, both reducing their flight frequency and selling aircraft. Representatives from Eagle Air, Air Iceland Connect, and Isavia all attended Thursday’s meeting.

Vilhjálmur argued that it is part of the government’s agenda to support public transportation. He voiced his support for what is being called ‘the Scottish solution,’ a reference to the Scottish government’s policy of subsidising “air travel to the remotest parts of the county” in order to “support and develop direct routes across Scotland to foster inward investment, stimulate local business and maintain a thriving tourism industry.”

If this system were to be put into place next year as has been proposed, the first step would be subsidising domestic air fares. “I think that it’s entirely clear that domestic flights can’t compete in this small market with the increasing number of passengers,” Vilhjálmur said. “It won’t be enough to just increase domestic flights.”

“We need to make guaranteed contributions in order to maintain some basic services,” he continued. “Create a public transportation system so that flights can maintain a set frequency and price stability. And then we’ve got to assist customers at the other end. We’ll do that via the Scottish solution.”

Mink Farming Faces Uncertain Future

Mink farms in Iceland have taken significant losses again this year as the price for mink pelts has been at half the cost of production for three years running, RÚV reports. According to the chairman of the Icelandic Fur Breeder’s Association (SÍL), it is likely that many mink farmers will close their operations if the government does not intervene.

Overproduction has led to a drop in prices for mink pelts in the global market, which has been exacerbated by the strengthening of foreign currencies in relation to the króna. Reduced production has helped stabilize prices somewhat, but there is still great uncertainty in the market. “This is now clearly the worst it’s been for mink farmers in twenty years,” said SÍL chairman Einar Einarsson.

As a result, SÍL wants the government to intervene and provide financial assistance to struggling mink farmers. Einar says that mink farmers were in a similar situation in 1990. Back then, the government temporarily supported farmers, but there has never been a guarantee of subsidies in the long term. “We’re asking for three-year government involvement,” said Einar. “And then we’re talking about one year that would just go straight to farmers.”

Following this, Einar explains, SÍL wants the state to invest in feed production facilities for mink, which they envision as a two-year program. “It is also very important to…reduce and stop landfilling of organic waste. Strengthen the feed production facilities and work on that waste.” As it stands, the organic byproducts of fur farming are often buried instead of utilized for other purposes, although some mink farmers have attempted to make use of byproducts, such as mink fat.

“We lost five mink farms this last fall,” Einar continued, saying that many other mink farmers are also considering closing their operations in the near future, if SÍL is not successful in convincing the Icelandic government to come to the struggling farmers’ aid.