In Iceland MPs get big pay rise despite scandals But Pirate Party co-founder Birgitta Jonsdottir urged MPs to reject the pay rise to gain public confidence.

Politician and co founder of Iceland's Pirate Party Birgitta Jonsdottir (C), Asta Gudrun Helgadottir (2nd,L) are seen alongisde party members after parliamentary elections in Iceland, on October 25, 2016
(AFP/File) 

Lawmakers in Iceland are to receive a 44 percent pay rise just six months after then prime minister Sigmundur David Gunnlaugsson resigned in a tax-evasion scandal, officials announced Tuesday.

The move drew condemnation from the anti-establishment Pirate Party which said the pay rise would increase mistrust amongst the public.

The national Kjararad commission tasked with setting public service salaries announced the pay rise, which increases the salaries of members of parliament to 9,000 euros a month.

"It is very important that the elected members are financially independent and dependent on no-one," said the Kjararad.

"Their work has no clear parallel on the work market, as they are elected for their jobs in general elections and have to renew their mandate at least every four years."

But Pirate Party co-founder Birgitta Jonsdottir urged MPs to reject the pay rise to gain public confidence.

"If all parliamentarians reject these raises to show clearly that they are concerned about stability in the work market, it will be a clear message to the public that we will not help create a gap between the Parliament and the public," Jonsdottir said on Facebook.

"It is necessary to build social trust in times when there are waves of discontent within the work market."

The news comes just days after Gunnlaugsson's successor as premier Sigurdur Ingi Johannsson announced his resignation after his centrist Progressive Party, which was governing in a coalition with the Independence Party, suffered a drubbing in snap elections provoked by the Panama Papers tax-evasion scandal.

The elections' main beneficiaries were the Pirates, who with their three centre-left allies won 27 seats in the 63-member parliament, compared to the Progressive and Independence parties combined 29 seats, setting up Iceland for tough horsetrading over its next government.

The Panama Papers revealed that 600 Icelanders including bankers, business leaders and cabinet ministers -- amongst them Gunnlaugsson -- had holdings stashed away in offshore accounts.

The Panama Papers scandal came just eight years after the 2008 financial meltdown that wrecked the country's banking industry, leading to an International Monetary Fund bailout.

Both events provoked the public's ire, the latter widely seen as encouraging voters to punish the incumbent coalition by voting for the anarchist Pirates.

The election failed to deliver a clear majority, leaving the country in political deadlock.

President Gudni Johannesson is set to task Finance Minister Bjarni Benediktsson of the Independence Party with trying to form a new government.

The Kjararad is made up of five people -- three named by Parliament, one by the Supreme Court and the last by the Minister of Finances.