Government negotiators say a decision to end cold progression and upgrade social benefits looks possible next week. The gradual tax increase will be abolished on January 1 next year, and negotiations on the details are in full swing.
“A decision in the Council of Ministers on Wednesday is possible,” says an insider. The social benefits will also be valorised from next year, apparently they are also in the final sprint here, the last details are still open. If a decision is made in the Council of Ministers, the necessary parliamentary decisions can follow in the autumn.
Now it can be fast
Most recently, Chancellor Karl Nehammer (ÖVP) and Vice Chancellor Werner Kogler (Greens) spoke of a “historic step” taken with the abolition of cold progression. In the future, two-thirds of cold progression revenue should automatically flow back to the taxpayer through income tax. In concrete terms, this means: higher wages, but no more taxes. It was unclear until the end how the last third part would be used – but now, according to insiders, it could happen soon.
This third concerns a total of approximately EUR 600 million, which will flow back to citizens and are intended to relieve the burden on small and medium incomes in particular. These structural measures are part of the third aid package presented in June. The elimination of the cold progression is not a one-time, but a lasting measure of relief.
“National solidarity” in the fight against inflation
Vorarlberg Governor Markus Wallner (ÖVP), who returned from his health holiday this weekend, spoke out for speed and a “national solidarity” between the public sector and the social partnership in the fight against inflation. An end to the cold progression coupled with “reasonable wage agreements” could preserve purchasing power, he said on Sunday.
Video: Wallner returns to the office
Unions skeptical
The trade unions are following the negotiations with interest, as they will probably also influence the collective bargaining game in the autumn. ÖGB chairman Wolfgang Katzian fears: “Lower wage agreements as a result of the annual cold progression compensation would mean that the planned aid does not reach the employees or does not fully reach the employees.” metal industry.
Source: Krone
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