Economic inequality cannot be assessed based on accounts alone

Mayor Avaaraq Olsen (IA) reacts to the recent debate about inequality and differences in the municipalities' economy and demography, which has been raised, among other things, by member of Inatsisartut Anders Olsen (S) through a number of section 37 questions and says that, - the inequality is so great that it can no longer be ignored.

Here, Anders Olsen (S) and Qeqqata Municipality's Mayor Malik Berthelsen (S) are calling for a clearer political prioritization of development in municipalities outside Nuuk - among other things by moving self-governing workplaces to the coast.

Mayor Avaaraq Olsen (IA) reacts to the recent debate about inequality and differences in the municipalities' economy and demography, which has been raised, among other things, by member of Inatsisartut Anders Olsen (S) through a number of section 37 questions and says that, - the inequality is so great that it can no longer be ignored.

Here, Anders Olsen (S) and Qeqqata Municipality's Mayor Malik Berthelsen (S) are calling for a clearer political prioritization of development in municipalities outside Nuuk - among other things by moving self-governing workplaces to the coast.

But according to Avaaraq Olsen, it gives a simplistic picture to conclude inequality based solely on Kommuneqarfik Sermersooq's total accounting profit and high level of construction.

- Economic inequality can be calculated in many ways. There is no one clear method, and the assessment depends on which criteria you choose to use as a basis, says Avaaraq Olsen (IA) and refers to the Ministry of Finance's own assessments.

One-off effect explains high capital costs

Naalakkersuisoq for finance's paragraph 37 answer to Anders Olsen on the municipalities' economy and demography shows that Kommuneqarfik Sermersooq has had a total operating profit of DKK 1.9 billion. DKK over five years and significantly higher capital expenditure than the other municipalities.

According to the mayor, however, a significant part of this is due to a concrete and temporary event.

- The large deviations can largely be explained by the municipality's takeover of Nuuk City Development in 2022. This had a significant one-off effect, because the municipality had to buy schools, day care centers and other buildings from the company and finance the costs with loans, explains Avaaraq Olsen.

When adjusted for this takeover, Sermersooq's capital expenditure per inhabitants, according to the mayor, on a level with the other municipalities.

- This underlines why it can give a misleading picture to draw far-reaching conclusions on the basis of total accounting figures alone, she says.

Substantial but opaque compensation

At the same time, the mayor denies that there is no real financial equalization between the municipalities - an impression that she believes the debate can leave.

- There is a significant equalization today, but the system is complex and unfortunately not particularly transparent, she says.

Among other things, she points out that around DKK 90 million is redistributed annually from Kommuneqarfik Sermersooq to the other municipalities via the block grant. Sermersooq contains approximately 43 percent of the population, but only receives about 38 percent of the block grant because demographics and dependent burden are taken into account.

In addition, around DKK 113 million in personal taxes are redistributed via the equalization scheme, and Sermersooq's citizens pay, according to the municipality's own estimates, around DKK 400 million into the joint municipal tax equalization, but only get around DKK 80 million back.

- These are just some examples of the existing compensation, says Avaaraq Olsen.

Centralization is a national political issue

Anders Olsen (S) has, among other things, criticized Naalakkersuisut for not creating development in other municipalities and that there is a large degree of centralization in Nuuk by pointing out that both Royal Greenland's administration and the Arctic Command are located in Nuuk, and he has received support from Qeqqata Municipality's mayor Malik Berthelsen (S), who warns against a "brainwashing" that a good life can only be lived in the capital.

However, according to Avaaraq Olsen, centralization is not a problem that the municipalities can solve alone.

- It is closely related to overall national political priorities regarding the location of workplaces, educational offers and community-supporting institutions, she says.

The chairman of the Economic Council, Torben M. Andersen, has previously called the debate important and emphasized that Naalakkersuisut must take a political position on how development should be created throughout the country.

Looking forward to municipal reform

Avaaraq Olsen points out that political processes are already underway. In the Finance Act speech for 2026, it appears that an upcoming municipal reform is expected to include a reassessment of the financial equalization between the municipalities with a view to more equal conditions.

- It is a process that Kommuneqarfik Sermersooq looks forward to participating in - in a constructive dialogue with all parties and on an informed and transparent basis, says the mayor.

She concludes with a clear call:

- I would very much like to continue the conversation about the municipalities' financial conditions. But the facts must be on the table so that the debate is not based on simplified representations that do not give the full picture - neither of Kommuneqarfik Sermersooq nor of the other municipalities' situation.