Help ahead for low-income families?

06.06.2022 - 10:38
Aktuelt
Help ahead for low-income families?
The government is considering financial support for those squeezed hardest by rising inflation
The cost of living has skyrocketed as inflation rates are at the highest levels seen in almost 40 years
 

As most of us know – and many are feeling it these days – inflation tends to hit lower-income households hardest.

The government is highly aware of this, and possible solutions are being discussed every day, says Prime Minister Bárður á Steig Nielsen.

“If the current inflation does not slow down soon, we may need to step in with some measures to support low-income households,” he said on 23 May.

“It is, however, crucial that any such measures are temporary because boosting people’s purchasing power every time we see consumer price hikes will just further fuel the inflation.”

 >> SEE ALSO Food prices may rise even higher

A week later, finance minister Uni Rasmussen said that it is too early for the government to start offering direct financial assistance.

“The Ministry of Finance is constantly monitoring the inflation and whether it is wise to introduce government measures to boost people’s purchasing power. On balance, it would make sense to wait at this point,” he said on 31 May.

The finance ministry advises against offering state subsidies that are not financed via reductions in other public expenses or higher taxes.

 >> SEE ALSO A detailed look at grocery prices

“If we are to provide financial assistance, this should be done through the existing social services.”

Another reason why it is too early to offer direct financial assistance, according to the finance minister, is that price hikes in the Faroes have not yet reached the levels seen in other European countries.

“A significant factor in the price hike across Europe is the rising gas prices, and we have yet to see higher electricity prices here in the Faroes.”

 >> SEE ALSO Electricity prices to remain fixed for 2022

Like the Prime Minister, Rasmussen says that any financial aid packages should be temporary and fully funded by lowering other public expenditures or increasing state revenues.

“Unfunded aid packages may result in even higher inflation and even more pressure on the housing market.”

The finance minister added that most international financial institutions expect inflation to slow down later this year or next year.

 

Read the Faroese versions of this article here and here.

More Faroese News in English.

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