Demand for food assistance continues to rise

Food assistance applications hit a record high last year, and the number is expected to climb even higher this year.

Two of the country’s main providers of food assistance, the Red Cross and the Salvation Army, are seeing a clear increase in demand for food assistance, especially from single providers.

This comes as no surprise, says Malan Johansen, CEO of the national bank.

“The inflation rate is declining and it looks like interest rates will not rise much further, which is a good sign,” she says.

“But we should not expect a significant drop in living costs any time soon.”

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The government is aware of this and hopes that its proposed tax relief will help those who are most financially vulnerable.

However, this is unlikely to be of great help to families who are currently struggling to make ends meet, says Sonja Jógvansdóttir, who heads Samtak, the umbrella organisation for Faroese trade unions.

“This is a good initiative, but it does not adequately reflect the dire situation that many families are in these days,” she says.

“Middle-income earners will see a difference, but those with a lower income will continue to struggle.”

One reason for this, she adds, is that many low-income workers pay most of their taxes to their local councils and not to the government.

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Finance minister Ruth Vang acknowledges that it is not easy to offer substantial tax cuts to low-income earners because they pay relatively low government taxes as it is.

“It is not easy to strike the exact right balance here. This is what we can do at this point,” she says.

“We and previous governments have been trying for years to include council taxes in our tax restructuring efforts, but this is a complex process.”

She recognises that for many workers, wages are not keeping up with inflation. But she says this is likely to change soon:

“With the wage increases we are preparing, many workers will see an increase in their purchasing power as early as next year. So, there is hope ahead for many households.”

Read the Faroese versions of this article here and here.

English version by prosa.fo.

More Faroese News in English.