Minister Brunner: – ‘We are talking about growth’

The mood of the population was better before: the Covid crisis and now the war in Ukraine make it difficult to be optimistic. Dr Georg Wailand, deputy editor of “Krone”, interviewed Treasury Secretary Magnus Brunner. The Finance Minister begins with good economic news: “Despite all the uncertainties that exist worldwide, we are still talking about positive economic growth in Austria.”

“No price cap on fuel”
The finance minister is clearly determined on one point: he does not attach much importance to a price cap for petrol and diesel, for example: “That was a campaign tool in Hungary and Slovenia, but it didn’t work. People were standing in long lines at the gas stations.”

Of course, economic researchers initially expected a gain of 5.2 percent, which has declined by one and a half percentage points due to the most recent events. Tax revenues are also developing well for the Minister of Finance: “Without corona aid, we would have even achieved a small surplus.” This was also the result of the rapid crisis aid. Brunner: “No country in the EU has presented such a large package and we also helped faster than the others.”

We were faster and also helped more
As a result, the economic engine continued to run and employment remained at a high level. Brunner: “In an international comparison, Austria is doing very well, in Europe we are equal at the top.”

“At a reasonable level in 2025”
As gratifying as that may be: a crisis remains a crisis, at some point those debts have to be paid off again for the aid payments? Brunner: “That’s right, and I think that’s very important: we will both implement the tax reform as planned and then switch back to a stance of fiscal consolidation. We should be able to get back to a reasonable level by 2025. Therefore, deleveraging must continue and budget deficits must be reduced. We want to reorganize the budget in a sustainable way, while the Maastricht criteria continue to apply.” (For example, a return to the debt ratio of 60 percent.)

Debt reduction despite 4 billion package
Isn’t that a contradiction: the state has now put together a EUR 4 billion package in Austria that will benefit households and companies – and at the same time the debt must be reduced again? Brunner: “This four billion is an incredible amount of money. But if we manage to keep the economy going, we can do that in the medium term.”

How this is possible is now apparent, for example, in the case of corporation tax: the reduction from 25 to 23 percent will, paradoxical as it may sound, lead to considerably higher income. Brunner: “For 2021 we expect an additional 55 percent income from the KÖSt, which is three billion euros. Because a lower KÖSt is a competitive advantage for Austria as a location.”

Embargo on Russian gas would have dramatic consequences
As for the effects of the explosive rise in energy prices, Austria has relieved EUR 900 million by cutting energy taxes by 90 percent. In addition to the other well-known measures such as the increase in the commuting allowance, the energy cost subsidy of 150 euros, etc., this aid reaches the people quickly and effectively. The Minister of Finance: “Yes, the state must help, but that is precisely why we must not lose our sense of its size: this package of 4 billion is one percent of our gross domestic product and, for example, B. twice the entire state budget of Vorarlberg. That gets things moving!”

The finance minister does not attach much importance to a gas embargo against Russia: “Austria is more dependent on these supplies than other countries, without gas from Russia the industry and suppliers would suffer extremely. Such a boycott would have a dramatic impact on our economy.”