AGREEMENT
between the Progressive Party, the Independence Party and the Left Green Movementon collaboration in a coalition government and reinforcing the capacity of the Althingi

— 2

INTRODUCTION——
In the new government, parties spanning the political
spectrum from left to right intend to establish a new tone,
concentrate their energies to key projects that will bring
Iceland into the front rank and take steps that will make
Iceland a good place to live for young and old alike.
The situation in Iceland as regards social issues is
in many respects unusual. While equilibrium has beenachieved in public finances, urgent challenges remain to
be addressed in the fundamental structures of society.
In terms of national averages, people’s financial position
has improved rapidly in recent years, but it is important tomaintain balance and ensure that everyone living in thiscountry is equal in terms of opportunity.
We must aim at long-term stability, with greater transparency in the economy and in all public administration
so as to build up public confidence in the way companies
are run, the financial sector, politics and social institutions.
Successes of many types have been achieved since theeconomic collapse, but the social reconciliation that thenation has long called for has yet to materialise. We must
work toward this. At the same time, we must respond to
rapid changes and new social attitudes in many fields, andalso global inequality and turmoil.
Iceland can make its voice heard in the international
arena by being a model regarding gender equality (where
there is still room for improvement), by setting itself ambitious targets in combating climate change, by protecting
its unspoiled natural vistas and by nurturing the naturalenvironment and wildlife. Sustainable development mustbe our guiding principle when we take decisions, in accordance with our international obligations and the goals wehave undertaken to respect.

3 —Broader consultation and more efficient communication must lie behind all planning that is to apply in the longterm. Inter-party collaboration in the Althingi (parliament)
must be increased; the Althingi itself must be made more
independent and its procedural framework, professional
support and status must be enhanced. Deeper consultation must be established with the labour market in orderto achieve a stronger society in as many areas as possible.
Finally, consultation with local government, and support forthe municipalities regarding the strengthening of infrastructures, regional development and financial relations
must be increased.
Unusual circumstances demand a change in approach,with more open administration, transparency and respect
for the projects with which we engage. It is the desire of
the parties now embarking on collaboration in a coalition
government and the reinforcement of the capacity of theAlthingi to tackle these challenges in a new way in theinterests of the people of this country, not least by taking
deliberate measures to bolster the Althingi and increase its
influence.

— 4

REINFORCING THE CAPACITY
OF THE ALTHINGI——The legislative, budgeting and supervisory functions of theAlthingi will be reinforced during this electoral term by means ofadditional support for the work of its committees and that of theparties represented in parliament. In addition, the government
aims to launch a considerable number of projects by means of aconsensual (non-party-specific) approach, so ensuring, to a greater
extent than has often been the case, that the skills, knowledge
and versatility of human resources available to the Althingi will be
employed in the service of Iceland and its people, irrespective ofwhat parties are in power or in opposition at any given time. Earlyin the term of this government, task forces with memberships thatcut across political-party allegiances will be appointed, in consultation with the relevant ministers, to work on matters including
the establishment of a national park in the interior of the country,
a policy on innovation, the development of indicators to measure
economic prosperity and the quality of life, an energy policy, theconstitution, the application and review of the legislation on foreign nationals and a ‘future committee’ to address the challenges
and opportunities associated with technological change.
We must achieve a consensus on the future structure of thefinancial system. A white paper on a future vision regarding thefinancial system in Iceland will be submitted to the Althingi for
discussion before decisions are taken on policy regarding thefinancial system.

The government’s main priorities, which areinterdependent and mutually supporting, may begrouped under the following headings:•

A strong society•

A vigorous economy•

Environment and climate•

Innovation and research•

Equal opportunities•

Democracy and transparency•

International affairs

5 —

— 6

A STRONG SOCIETY——

Healthcare
Iceland’s healthcare system should stand comparison with theworld’s best. All people in Iceland should have access to quality
services, irrespective of their financial standing and where they live.
The government will produce a comprehensive healthcare
policy for Iceland, taking account of the needs of all people in the
country and better defining the role of individual aspects of thehealth services and how they are interrelated. Healthcare targets
and the means to achieve them will be defined in collaboration
with the profession and the Directorate of Public Health, the aim
being to promote good public health and create an attractive
working environment for healthcare workers. Primary healthclinics will be given greater support as the first destination for
those using the service. Work on construction of a new treatment
centre in Landspítalinn (the National and University Hospital) will
begin next summer.
Innovation in healthcare will be given additional support sothat Iceland will be in the front rank and adopt the use of thelatest technology in this area, e.g. for teletreatment.
The government intends to reduce patients’ participationin the costs of the healthcare service with the aim of making it
more transparent and efficient. In this, the results produced by
the current system must be reviewed with respect to the mostseriously ill patients, with a concurrent examination of issues notcovered by the present system, such as travelling and maintenance expenses and the cost of dental treatment and psychological services.
A mental health programme up to 2020 will be financed andlaunched. Mental health services in primary health clinics andhospitals around the country will be bolstered and finance will be
secured for the emergency psychiatric ward and the children’s
and young people’s psychiatric ward of Landspítalinn so as tomeet their operational costs. The health services in upper secondary schools will be expanded, with an emphasis on mental
health.
The government will give special priority to preventive measures and health for all; this will include measures in the7 —educational system and the healthcare system and support tosports, youth activities and work among elderly people. The
use of economic incentives to promote health for all will be
examined.
The shortage of places in nursing homes has placed increased strain on hospitals and reduced the quality of life forthe elderly. It is clear that there is a substantial need for
nursing home development over the next five years. A major
campaign of development in this area will be launched and thiswill be reflected in the government’s budget projection. Part ofthe proposed National Fund could be used for this purpose.
Attention will also be given to putting the operations of thenursing homes on a firmer basis, and to other aspects ofservices, including home-nursing services, daily exercise
activities and rehabilitation.

Education and research
An effective educational system is a precondition forprogress, and the government proposes to launch a major
campaign in this area. Creative and critical thinking, literacy
and participation in democratic society will continue to be thefoundation of the Icelandic school system. Great priority will begiven to improving education in Iceland with the interest of pupils
and society at large as the guiding principle. Innovation anddevelopment must be supported at all levels of the educational
system, as education will be a core element in innovation in the
future.
It is important to promote recognition and respect for thework done by teachers, to increase their professional independence and focus attention on institutional development at alllevels of the educational system. Teacher shortages must be
tackled jointly by central government, local government and thetrade unions.
It is the government’s aim to ensure upper secondary
educational institutions the freedom and financial resources
needed to adopt their own policies within the framework of theUpper Secondary Education Act and to examine the advantagesof permitting pupils to move between levels of the school systemin their own time rather than according to their age.
The government plans to put special emphasis on
education in the arts and additional technical skills with the aim

— 8of making Icelandic society more competitive in international
comparison. Additional support will also be given to studies incrafts and industrial trades and to practical and vocational training so as to support variety and a stronger society based on abroader range of skills.
One of the government’s main aims is to ensure equal
access to education, irrespective of where people live and theircircumstances in other respects. The legislation on upper secondary and higher education needs to be revised and a clear
framework must be established for the activities of educational
institutions and collaboration with the business sector.
The aim is that Iceland should attain the OECD average asregards funding of university education in 2020 and the Nordic
average by 2025, in accordance with the projections by the
Science and Technology Council; this will be of great significancefor both teaching and research in the country’s universities. Workwill be done to solve the accommodation problems of the
Icelandic Academy of the Arts during the electoral term. Financewill be allocated for a plan of action on language technology toensure that Icelandic will be usable in the cybersphere.
An overhaul of the student loan system will be undertaken
in collaboration with the student movements, with the emphasison equal rights to education, efficiency and a study-grant system
based on the Nordic model.

Regional development
One of the fundamental preconditions for a well-functioning
society is housing security independent of people’s financial
standing or where in the country they live. One of the most
crucial factors in achieving this is to ensure that the managementof the economy will promote a continued reduction in interest
rates. The government intends to use its influence to bring aboutreforms designed to stimulate the property market and make it
more stable. The different challenges posed regarding housing
in various parts of the country will be examined, and also the
problems inherited from the past. Measures must be taken to
ensure that at any given time, analyses and statistics on the
supply and demand of housing are available, based on demographic trends and planning contingencies.
Short-term rentals of residential accommodation to tourists
have expanded greatly in the past few years, which has had a9 —significant impact on the property market in many parts ofIceland. Clearer rules on such rentals must be set, in collaboration with the local authorities and the tourist industry, in addition to which the monitoring of unlicensed operations must be
tightened. The possibility of granting the local authorities greater
powers to control the rental market must also be examined.
Better access for the general public to secure housing mustbe achieved by bolstering support systems and adopting coordinated policies on the development of socially-assisted housing,greater transparency on the rental market and increased provision of information on housing.
The government will take measures to lower the threshold
faced by young people and people of restricted means to enter
the housing market. To this end, the public support systems will
be reviewed so that support will primarily benefit people in thesecategories. Amongst other things, the possibility of using pension savings for this purpose will be examined.
Greater numbers of building lots, and levies on new buildings, will be discussed in negotiations between central and local
government on income bases and financing, as will a review of
the administrative structure applying to construction activities.
Support in the form of establishment grants from the state fornon-profit rental associations operated on a social basis must becontinued.
The government will take deliberate steps during theelectoral term towards abolishing the indexation of mortgages;
at the same time, counterbalancing measures will be taken tosafeguard the opportunities open to young people and people ofrestricted means to acquire property. Special priority will be given
to maintaining economic stability. Furthermore, the government
intends to create incentives and support to enable those householders who so wish to convert indexed mortgages to
non-indexed mortgages.
Property prices are one of the components in the consumer
price index in Iceland, and the great property-price rise in recent
years has therefore meant that the principals of indexed mortgages have risen far more quickly than they would otherwise
have done. The government will initiate an examination of how
real estate can be removed from the base for the calculation of
the consumer price index.

— 10Transport and telecommunication
All around the country there are aspects of civil infrastructurethat call for urgent attention. Examples can be found in transport
structures, telecommunications, utility systems and other public
works. In the coming years there will be opportunities for using
the state’s income from its assets for such projects, so ensuring
the reliable infrastructure foundation that is a precondition for
healthy economic activity in all regions.
The government intends to speed up development of theroad system and other transport infrastructures, both in the formof new construction projects and maintenance work. When priorities are chosen regarding the road system, special attention will
be given to the differences in the levels of facilities between
various regions, the needs of the tourist industry and considerations of safety. Work will be done on making domestic flights
a more economically attractive option for residents of the rural
areas. The development of public transport in all parts of thecountry must continue, and support will be given to the
proposed high-speed transport system within the metropolitan
area in collaboration with the Association of Municipalities in the
Metropolitan Area. Further facilities must be developed forpedestrians and cyclists in built-up areas. The possibility of
opening more international entry-points into the country must
be considered, so raising the number of local regions that canbenefit from tourism.
The installation of fibre-optic cables all over Iceland will becompleted in 2020; this will result in greater quality of life andprovide more opportunities for creating employment. The
government is keen to see Iceland continue to be in the front
rank when it comes to telecommunications and IT, and regards
it as a priority to have closer collaboration with telecoms on thedevelopment of basic infrastructures in this sphere.

11 —Law enforcement
Effective law enforcement is one of the premises for
ensuring citizens’ security. A draft of a new law enforcement
plan for Iceland has been produced, addressing security
levels, service levels, personnel requirements and financial
allocations. This plan must be completed, and work must
proceed in accordance with it. Rising numbers of tourists
create a need for increased financial allocations, and law
enforcement in the uninhabited central areas of the country
must be boosted over the busiest tourist season. The
Icelandic Coast Guard must be guaranteed sufficientfunding so as to be able to carry out its work.
The policy of severe punishments for drug use should beabandoned, while support must be increased formeasures against drug-peddling and the importing andproduction of drugs. Addicts must be guaranteed appropriate treatment through collaboration between the justicesystem, the social services and the health services.

Culture, creative industries and sport
Access to cultural amenities is an important part of life ina free society. Consequently, it is important that all people in
Iceland should be able to enjoy culture and the arts and to takepart in activities in these spheres themselves. The role of theauthorities is to create conditions in which variety, creativity andinitiative can flourish in the arts and the cultivation of people’s
cultural heritage. A plan of action on this will be drawn up, basedon the approved cultural policy.
Special attention will be given during the electoral term tosupporting the activities of Iceland’s three main museums. As
part of this, the Natural History Museum of Iceland will be given
a grant to open an exhibition of its holdings, and provision will bemade for the design of a building for a new museum in thefive-year budget projection.
Consideration will be given to changes in taxes on music,
published material in Icelandic and the media. The first step inthis will be the abolition of VAT on books. Economic indicators
will be drawn up for culture, the arts and creative occupations.
Work will continue on supporting creative occupations as anincreasingly important sector of the economy in Iceland.

— 12Royalties collected by recognised intellectual property rightholders’ associations will be taxed as investment income (capital revenues). Work will continue on the support of funds that
support artists with honorary salaries and grants for particular
projects.
Sports and youth society work play an important role in aprosperous and healthy community. Work with NGOs in thisarea will continue, aimed at the development of grassroot-level
work and the support of high-achieving individuals. Work will be
undertaken, together with the City of Reykjavík and the sports
movement on the development of a national sports stadium in
Laugardalur (in Reykjavík).

13 —

— 14

A VIGOROUS ECONOMY——
Economic strength is the basis for being able to ensure
long-term social stability, prosperity and quality of life. The
government will make a priority of having public finances rest
on a sound foundation which will make it possible to embark on
investment and development and so pass things on in a goodcondition for coming generations to build on. The committee on
the review of monetary policy is expected to complete its work,
after which the necessary amendments will be made to
the framework of the policy.
The government attaches priority to maintaining variety ineconomic life and having Iceland prepare itself to meet thechallenges and make use of the opportunities brought by
ever-faster technological changes. These will be accompaniedby new demands regarding staff education and skills and makeit imperative to maintain an environment that encourages innovation in all areas, including the state and long-establishedprofessions and occupations.
A Sovereign Wealth Fund will be established to hold therevenues derived from the country’s natural resources, beginningwith the natural energy resources. The role of the fund will be tobuild up the capacity to address significant economic shocks.
A demarcated part of the fund’s holdings will be used to stimulate innovation and support the growth and development of startup companies. This will sow the seeds for the development of
new and well-paid jobs in future. In addition, part of the fund will
be used to fund a campaign to expand nursing-home facilities
for senior citizens.

The labour market
The government will initiate a coordinated effort involving thesocial partners to ensure that collective agreements will deliver
real gains to wage-earners and society as a whole. Peace on thelabour market is a necessary condition for being able to work for
price stability and balance, so creating the economic conditions
for lower interest rates and an improved standard of living.
The government aims to work with the social partners to ensure

15 —a responsible labour market. Provisions on chain liability covering
subcontractors in a range of occupations must be introduced;
work must proceed on abolishing the gender pay-gap and combating social dumping, human trafficking and the practiceof companies switching ID numbers, and steps must be taken
to have more effective monitoring of safety and health in theworkplace.

Taxation
The wage increases of the past few years, together with larger
pension premium contributions by employers and a stronger
exchange rate, have reduced the competitiveness of Icelandic
business enterprises, particularly in export industries. It is vitalthat the government and the labour market seek ways of
improving the competitive position of Icelandic industries whileat the same time continuing to improve wages and terms for thegeneral public in the rounds of collective agreement negotiations that lie ahead. In order to promote a positive outcome, thegovernment intends to make it a priority to reduce the lower rateof income tax. The reduction of social insurance tax during theelectoral period will also be one of its priorities.
The overriding priority during the electoral term will be tomaintain economic stability and ensure that measures taken
regarding the labour market will deliver real gains in terms ofwages and terms. For this reason, the timing and implementation of measures to achieve the above aims will depend on theoverall outcome of the collective bargaining rounds over the
coming year or two.
Investment income tax will be raised to 22% at the beginningof the electoral term with the intention of making the tax systemfairer, irrespective of the source of income. Concurrently the tax
base for investment income will be reviewed.
With a view to improving Iceland’s international competitive
position, the government will make a reassessment of thearrangements for the reimbursement of research and development costs so as to abolish the ceiling that has applied to such
reimbursements.
The planned increase in VAT on tourist services will be
shelved, while alternative types of levies will be examined inconsultation with the tourist industry, including the possibilityof charging visitors to the country a fee on arrival or departure.

— 16Collection of the night occupancy fee charged to tourists willpass to the local authorities during the electoral term as part of
the arrangements negotiated between central and local government on the revision of revenue bases. The fee will be changed;
instead of a flat rate, it will be a proportion of the tariff charged to
the guest.
Attention will be given to changes in the tax rates imposedon music, Icelandic printed matter and the media. The first stepin this direction will be the abolition of VAT on books. Royalties
collected by recognised intellectual property rightholders’ associations will be taxed as investment income.
The time is ripe for a comprehensive review of levies imposedon transport, i.e. ‘green taxes’ and tax concessions, so as to bringthem into line with the goals regarding measures on climatechange. The carbon tax will be raised by 50% immediately at the
beginning of the electoral term and then raised further in the
coming years in step with the expected programme of action on
climate change. The number of exemptions granted from thecarbon tax will be reduced.
More resources will be allocated to tax investigations aspart of the effort involving the social partners to achieve a more
responsible labour market. It must continue to be a priority toengage in international collaboration against tax evasion, with
Iceland in the front rank of countries pressing for the abolitionof tax havens.

Agriculture
Iceland should be a leader in the production of wholesome
agricultural products. Emphasis will be placed on innovation andproduct development in order to support viable rural communities, stimulate value generation and utilise opportunities presented by an interest in food culture, with sustainability and quality as
guiding principles.
The main aim is that Icelandic agriculture should besustainable and the protection of its animal stocks guaranteed.
One of the government’s first tasks will be to respond to the
problems faced by sheep farmers in both the short and the longterm. Together with a new ‘generation’ of agricultural agreements, special adaptation agreements will be introduced tocover new activities in the rural areas. These will open the way
for farmers to build up new agricultural activities or to establish

17 —themselves in other occupations. Adaptation agreements of thistype covering changes of agricultural activities will be for limited
periods and will be subject to conditions regarding stableregional domicile, value generation and occupancy of the farmunits in question, and they will contribute towards innovation,
protection of the natural environment and new emphases in
research and education.
Stable production, efficient monitoring and innovation arepreconditions for the agricultural sector’s being able to make useof the opportunities that the future will bring. The government
intends to do more to guarantee the right of the consumer toinformation regarding product origins, production methods, drug
usage and the environmental impact of agriculture.
The government will take measures to develop thebioeconomy still further, to promote ‘green’ solutions and meansof reducing the environmental impact of food production bymeans of incentives and support aimed, amongst other things,
at making the agricultural sector carbon-neutral. Particularsupport must be given to organic agriculture.

Fisheries
Iceland’s fisheries sector occupies a very prominent
position in international comparison due to the emphasis thatis placed on sustainable utilisation of resources and on researchand development. Its competitiveness on international markets
must be ensured, and also that it will continue to be able to engage in innovation and product development so as to raise thevalue of its products. In addition, steps must be taken to make thefisheries carbon-neutral, e.g. through increased research on theuse of renewable energy sources for the fishing fleet.
Marine research plays a key role in the sustainable utilisation of theresources of the sea, and it must be expanded. When legislation
on fishing fees is reviewed, the main aim must be to ensure thenation a fair share of the profits from utilisation of the resource
and to have the fee take account of the profitability of the fishingenterprises. Resource fees should be, on the one hand, a payment
for access to a limited resource and, on the other, the payment of ashare of the profits made from its utilisation.
It is important to support fishing villages and maintainvariety of options in their scope for growth so as to ensure theireconomic viability. The arrangement regarding the catch permits

— 18under the administration of the state, including those applying tocoastal fisheries, must be assessed with a view to better ensuringstability in the population of rural districts and opportunities for
new entrants to the industry.
Fish farming is a growing industry that presents opportunities for greater employment, but it must be developed with theutmost caution and in accordance with scientific advice so as notto jeopardise biological diversity. In step with the growth of theindustry, measures must be taken to ensure necessary studies
and monitoring of the impact on the living environment, and thefuture arrangement regarding licensing fees must also be
discussed.

Tourism
A long-term policy on tourism will be laid out in collaboration
with players in the tourist industry and with sustainability as theguiding principle. From the point of view of environmental protection and regional economic activity, it is desirable that the flowof tourists to Iceland should be dispersed more
evenly across the country. Regional marketing authorities mustbe given support. Priority will be given to identifying capacity
limits as regards the natural environment, the local community
and the economy. The need for access control at tourist attractions which are publicly owned or under public administrationmust be assessed, in addition to which declarations of protectedarea status could be used to reduce pressure on vulnerable sites.
The work that has already been begun on resolving clashes ofinterest between the tourist industry and laws governing the rightto access to land must be concluded.
Substantial support will be given to studies and analyticalwork on tourism and on building up infrastructures and the workof wardens. Care must be taken to ensure that development of
the tourist industry does not result in popular tourist destinations
losing their appeal and to ensure that some areas will continue tobe largely devoid of people, both in order to protect the naturalenvironment and to provide a special experience for the visitor.
The planned increase in VAT on tourism will be shelved andother types of levies will be examined instead in consultation withthe tourist industry, including the possibility of charging visitors
to the country a fee on arrival or departure. An owners’ policy will
be developed for ISAVIA.

19 —The financial system
The financial system should be robust and serve society
in a fair and efficient manner. The level of public ownership offinancial enterprises in Iceland is the highest in Europe, and thegovernment aims to seek ways of reducing it. It is neverthelessclear that the state will be a leading investor in at least one of
the financial institutions that play an important role in the overallsystem.
A white paper setting out a future vision for the financial
system in Iceland will be submitted to the Althingi for discussion
before any decisions influencing policy on the financial system
are taken.
The main aim in work on the white paper will be to stimulateconfidence in the Icelandic finance market and to increase transparency and financial stability. Even though important reforms
have been made in the legal environment of financial enterprises,
further improvement is needed. The ownership of financial institutions that play a key role in the system must be transparent. It is
the government’s wish to see work proceed on further efficiency
in the financial system with the aim of reducing costs to the consumer. It is important to reduce risks associated with unrelated
aspects of the operations of financial enterprises. While a futurearrangement is being drawn up, particular attention should begiven to the experience gained in other small open economies
and in the other Nordic countries.

20 —

— 21

ENVIRONMENT AND CLIMATE——

Climate issues
LIn its policy on climate, Iceland is guided by the goal of
the Paris Agreement of 2015 to limit the average increase thetemperature of the Earth’s atmosphere to 1.5°C from the reference level. The main aim of the government’s climate policy is
to avoid negative effects of climate change on marine life. In noother part of the world has the temperature risen as much as it
has in the Arctic. Thus, it is incumbent upon Iceland to conduct
more extensive studies of acidification of the ocean in collaboration with the academic community and the fishing industry.
Iceland is moreover bound to achieve a 40% reduction in emissions of greenhouse gases, based on the 1990 level, by 2030.
It is the government’s wish to go further than is envisaged
in the Paris Agreement and to aim to have a carbon-neutral
Iceland by 2040 at the latest. The aim is to achieve this by making
a permanent reduction in greenhouse-gas emissions and also
through changes in land use in accordance with internationallyrecognised standards and by incorporating approaches thattake account of the local ecology and planning considerations.
Support will be given to industrial sectors, individual enterprises,
institutions and local authorities in their attempt to set
themselves targets pertaining to climate-change. The government aims to have all major public projects assessed in termsof their impact on the climate-policy targets. Concessions for
new investment projects will be subject to the condition that the
projects have been assessed in terms of their impact on climate
and how they conform to Iceland’s international undertakings
regarding reductions in greenhouse-gas emissions. Emphasis
will be placed on involving all players in society, and the generalpublic, in reducing greenhouse-gas emissions, and support will
be given to innovation in this sphere.
A climate council will be established and a plan of action onemission reductions will be drawn up, with a time-scale, and financed. The plan of action will include targets regarding transport
and the proportion of vehicles powered by environmentallyfriendly fuels in the total number of vehicles in Iceland, utilisation

22 —levels of fuel and power in business and industry, theintroduction of international conventions on the protection of
the oceans, ‘green steps’ in state operations and a Climate Fund,and moves will be made to prohibit the use of heavy oil in vessels
within Iceland’s economic zone.
Collaboration will be established with sheep farmers on
neutralising the carbon emissions from sheep farming in accordance with a plan of action. Other production sectors will be
invited to collaborate on comparable projects.

Environmental issues and natural resources
A national park will be established in the central highland
region of the country; this will be done in consultation witha committee composed of members of all political parties, theMinistry for the Environment and Natural Resources, the local
authorities, nature-conservation and outdoor-life associations
and other players. The possibility of establishing national parks
in other regions will also be examined.
It will be a priority project of this government to utilise thepower already harnessed in Iceland in the most economicallyefficient way possible. To this end, steps must be taken to makethe electrical transmission and distribution system morereliable, to connect key regions better than is done at present
and to ensure security of electrical power delivery in all parts ofthe country. The extent to which ground cables could be used inthese connections in an economical manner should be
investigated. No power lines will be built across the central
highland region.
The handling by the administrative sector of decisions on
the building of power lines has taken a long time for various
reasons. It is important to speed up this process where possible in accordance with current legislation, e.g. by strengthening the Environmental Issues and Natural Resources Appeals
Committee. Furthermore, the government is in agreement on theneed for a review, during the first half of the electoral term, of theprovisions on access by NGOs to decisions on environmental
issues with the aim of ensuring this right in the earlier stagesof the licensing procedure; this would made for quicker andmore secure processing of licences without abridging this right.
Furthermore, Iceland’s international obligations under the Aarhus
Agreement are to be implemented.

— 23Legislation must be enacted on wind farms and work must
be undertaken with the local authorities on guidelines regarding
planning decisions and licensing.
A long-term energy policy will be adopted during theelectoral term in consultation with all parties represented in the
Althingi. The policy will be based on projected long-term energy
requirements, taking into account the government’s intentions
regarding, e.g., r°ranteed for both the public and industries. An‘owner’s policy’ for Landsvirkjun will take account of the energy
policy.
Special priority will be given to giving ‘protected area’
status to sites identified in the Master Plan for Nature
Protection and Energy Utilisation as being in the ‘Protection’category and also to other protected areas in accordance with
the nature conservation plan, taking into account the plans forthe establishment of a national park in the central highland.
By means of natural resource accounting it is possible to acquire
a better view of Iceland’s natural resources and to define theirutilisation with sustainability as a guiding principle.
A long-term campaign will be launched against the useof disposable plastic with particular emphasis on preventive
measures and on cleaning up and removing plastic pollutantsfrom the environment, both on land and on the beaches. Efforts
must be made to improve sewage handling, involving central
government and the local authorities; there is a pressing needfor development work in this sphere.
Icelandic fauna constitute part of the natural environmentthat calls for protection. Furthermore, the natural environmentis the greatest attractive asset that Iceland has from the pointof view of tourists. The legislation on the protection, welfare andhunting of wild birds and mammals is in need of review.

25 —INNOVATION AND RESEARCH——
Innovation and channelling of ingenuity are important forthe development of a multi-faceted economy, a strong
competitive position, economic growth and welfare in any nation,
not least in view of the societal changes that can be expectedin employment and education as a result of rapid technologicalchange. Part of the proposed National Fund could be used tosupport initiatives in this area.
A comprehensive policy on innovation must be developed
for Iceland in collaboration with representatives of the politicalparties and in close consultation with the business sector andthe academic community. Consultation on this policy mustalso involve the education system so as to ensure that it will be
integrated with the future vision regarding education at all levels,from pre-school to post-secondary level.
The government will apply the measures laid down in the
recent action plan produced by the Science and Technology
Policy Council; these include having a ‘sign-post’ on research
infrastructures set up. The government will seek to ensure thatconditions for entrepreneurs and start-up companies in Iceland
are outstanding. It is clear that the working environment of theseenterprises needs to be simplified, with a more developed support system and easier access to funding and foreign experts, andthat support must be given to attempts to break into international
markets.
With a view to improving Iceland’s international competitive position, the government will make a reassessment of thearrangements for the reimbursement of research and development costs with a view to abolishing the ceiling that has applied
to such reimbursements. Generous support will continue to begiven to competition funds in accordance with the policy laid
down by the Science and Technology Policy Council.
Priority will be given to encouraging innovation in public
services and administration, the welfare services and projects
dedicated to meeting goals regarding measures to combat
climate change. The framework and opportunities regarding
collective funding will be examined and the activities of the— 26

New Business Venture Fund will be reviewed in the light of therecommendations that are expected from a task force appointed
to examine it. The scope that Promote Iceland (Íslandsstofa) has
for doing more to publicise Iceland as a cradle of research anddevelopmental projects will be examined. Work will be launchedon the preparation of a policy on cluster ventures for Icelandin which the strengths of various occupational sectors can beharnessed: those of the educational system, research bodies,
the business sector, the local authorities and other players.

27 —

— 28

EQUAL OPPORTUNITIES——
Iceland should be a country of opportunities for all. For
this to be a reality, special measures must be taken to improve
the standing of those who are in the most precarious positions. A survey must be made of the economic standing of thelowest-paid groups in Icelandic society. Proposals for remedial
measures must be made, applied and followed up. Particularattention must be given to the position of children who live inpoverty, as they constitute one of the most vulnerable groups insociety.

Gender equality
The government regards gender equality as a priority. Among matters to be put on the agenda in consultation between
the government and the social partners are the lengthening ofparental leave (maternity/paternity leave following the birth of achild) and higher payments during parental leave.
Deliberate steps will be taken to eradicate gender-based
wage discrimination. For this purpose, it will be necessary,amongst other things, to publicise the gender pay-gap more
prominently, e.g. in companies’ annual financial statements.
It must be ensured that comparable jobs are evaluated in acomparable manner, in accordance with the demands that are
made of enterprises according to law and that are supposed tobe reflected in the new Equal Pay Standard.
The new plan of action on improvement in the handling of
sexual offences will be applied and financed in full. Under theplan, allowance is made for strengthening the mechanisms in thecriminal justice system with the aim of improving the position of
victims in the system and upgrading and coordinating services tovictims across the country, not least in the healthcare system. The
legal environment in which sexual offences are processed will be
examined with the aim of improving the standing of those whopress charges regarding sexual offences. The Istanbul
Convention, on preventing and combating violence against
women and domestic violence, will be ratified. Furthermore, thegovernment will have a plan drawn up, in collaboration with the29 —local authorities, on the eradication of sexual violence, not leastin the cybersphere.
The government aims to put Iceland in the front rank regarding LGBTI people’s issues with ambitious legislation on self-determination based on gender awareness in accordance withthe recently-published resolution on the human rights of intersex
people. The legislation should lay down provisions under which
individuals are able to determine their gender and gender
identity; their gender awareness is to be respected, individuals
are to enjoy the right to respect of their physical persons andequality before the law irrespective of their sexual orientation,
gender awareness, gender characteristics and expression of theirgender identity.

Welfare issues
A good society is one that ensures the quality of life ofchildren. The Althingi has agreed that there is a need to bridge
the gap between the end of parental leave (maternity/paternity
leave following the birth of a child) and the time when the child
begins pre-school; the lengthening of parental leave is an important contribution by the state towards building that bridge. The
joint provisions by the state, the local authorities and others must
guarantee all children equal opportunities regarding leisure-time
activities and cultural activities. The provisions of the UN
Convention on the Rights of the Child must be applied, including
as regards increased influence on the part of children on thecommunity in which they live.
The amount that elderly people are permitted to earn from
employment without a reduction of their state pensions will
be raised to ISK 100,000 as from the end of this year. Tariffs ofcharges for dental treatment for the elderly and for recipients ofdisability pensions will be updated to reduce the costs paid bythese groups.
The government will enter into consultation with representatives of disability pension recipients regarding changes
to the benefit system with a view to reaching a consensus on
simplifying the system, ensuring that disability pension recipients
have enough to live on and putting them in a better position toparticipate in the community. In this consultative process, thegovernment will confer mainly with the Organisation of Disabled
Persons in Iceland (Öryrkjabandalagið) and the National

— 30

Association of Persons with Intellectual Disabilities (Þroskahjálp)
and will aim to complete the review as soon as possible. The
first step on the part of the government will be to organise theprovision of part-time jobs in the public sector for persons with
reduced working capacity; at later stages it will be importantto have the private sector play an active role in this project. The
financial standing of disability pensioners who have children
over the age of 18 who are pursuing studies will be strengthenedby maintaining unchanged support contributions to the parent
during normal study periods.
The ratification of the right to User-Defined Personal
Assistance, with amendment of the Disabled Persons Act, mustgo ahead. The UN Convention on the Rights of Persons with
Disabilities will be implemented. Provisions must be introducedin law on individuals’ right to the assistance of sign-language
interpreters in daily life.
Never before have there been more refugees in the world
due to armed conflict, persecution and environmental catastrophes. Iceland will make its contribution to solve the refugee
crisis and will accept more refugees. Humanitarian considerations and international obligations will be the basis for theseactions and importance will be attached to the quality andefficient handling of applications for international protection.
In addition, continuity and cohesion in services will be ensured,and assistance will be provided to those who receive suchprotection. An inter-party committee of parliamentarians will be
entrusted with assessing application of the Foreign Nationals
Act and, as necessary, the revision of that act.

31 —

— 32

DEMOCRACY AND
TRANSPARENCY——
The government attaches priority to good working methods,
open administration and transparency. Every effort will be madeto make information available and accessible on decisions andprocedures that have a bearing on the public interest.
The government aims to continue with a comprehensive
review of the constitution in a collaborative process involving all
shades of political opinion with the involvement of the public,
employing, amongst other things, methods of public consultation for this purpose. A committee on the matter will commence
work at the beginning of the new parliamentary session, and thegovernment regards it as a priority to reach a consensus on thecourse the work is to take.
The government aims at cultivating trust in politics and public
administration. One element in this will be a review of the ruleson the registration of the interests of both government ministers
and members of the Althingi in the light of recommendations
received and international standards. Another element will
involve legislative amendments concerning the protection ofwhistle-blowers and improvements in the administrative andcommercial environment, this being done partly to comply withrecommendations from international bodies. The government
will set itself a code of ethics at the beginning of the electoral
period. It will also be proposed that the Althingi’s accounts beopened for inspection in conformity with what has already been
done in the government ministries.
A service survey will be conducted in state bodies during
2018 with a view to making effective improvements in public
services. An electronic service portal will also be established via
which people will be able to access public services and conduct
correspondence that is directed to government authorities.
In addition, a consultative portal will be opened to the publicthrough which comments will be sought on legislation andprojects that are already at the preparatory stage; this will enhance transparency. A campaign will be undertaken to simplify
regulations in the interest of the business sector and the general33 —public. The government regards it as a priority to have efficientand just public administration.
The government will improve the working environment of themedia, e.g. by reviewing the taxation structure under which theyfunction.
NGOs will also play a key role in a wide variety of issues andit is important to support this work. These issues include genderequality, sports and youth work, protection of the environment
and nature conservation, mental health and LGBTI issues.
With ever-increasing registration and sharing of personal dataand new techniques making it possible to exploit such data, it iseven more important than hitherto to protect the fundamental
rights of the individual in this area, for example as regards privacy. New personal data protection legislation will be introduced
during the electoral term and education and awareness-raising
activities will be bolstered.

34 —

— 35

INTERNATIONAL AFFAIRS——Europe and terms of trade
Nordic cooperation will continue to be one of the cornerstones of Iceland’s foreign policy. Iceland’s interests are best
served by remaining outside the European Union. The government considers that one of the most vital interests for Iceland
is to give its fullest attention to the implementation of the EEA
Agreement, and that the Althingi should be more involved inthis regard. Careful attention must be paid to securing Iceland’s
best interests in connection with the withdrawal by Britain fromthe EU, as Britain is one of Iceland’s main trading partners. Freeand open international trade is of advantage for small, open
economies and promotes their well-being. Emphasis will beplaced on entering into more free-trade agreements, both bilateral agreements and others made in concert with other EFTA
states, and on lifting barriers to trade. When such agreements
are made, special attention shall be given to promoting environmental issues and human rights, including women’s rights.

The Arctic and climate issues
Iceland has a special position as an Arctic state since a largepart of the country’s economic zone lies within the Arctic.
Increased shipping traffic and other activities in the region bringboth opportunities and challenges when it comes to the environment, the biosphere and traditional ways of life. The delicate
and vulnerable ecosystem of the Arctic should always enjoy thebenefit of the doubt. Iceland will have chairmanship of the Arctic
Council in 2019-2021. Arctic issues touch on almost all aspectsof Icelandic society and receive top priority in the country’s
foreign policy. Within the Arctic Council, Iceland will highlightthe UN’s global goals, climate issues and matters concerning
the ocean. In accordance with its approved policy on the Arctic,
Iceland will place emphasis on respect for the rights ofindigenous peoples and gender equality.

36 —Security and development
The government regards it as a priority to have national
security issues in good order. The National Security Policy
approved by the Althingi will be followed as a guideline inthis area. Application of the policy must proceed in close
consultation with the Althingi at all times. Iceland’s foreign
policy is based on clear principles as regards democracy,
human rights, gender equality, sustainable development
and the peaceful resolution of disputes. The government
intends to increase the country’s contribution towards
development aid over the coming years and aims that thisshould reach 0.35% of GDP in five years’ time. Iceland’s
participation in development assistance projects will be
under the auspices of civil institutions.