Christoph Badelt, head of the Fiscal Council, finds clear words for the government’s fight against inflation. This should “please stop throwing the money away”. Again and again, too many measures were taken according to the watering can principle, one of which – the “much too large energy cost subsidy 2” – is even still running. Badelt warns against spending more money on measures that get more people who don’t need it, he said.
He shares WIFO boss Gabriel Felbermayr’s warning that high inflation could make Austria resemble the “southern countries” of the eurozone and prices could move away.
The republic’s tax expert rejects a VAT reduction in the Ö1 “Morgenjournal”, which would be “a very, very big watering can that costs a lot of money”. He spoke of about two billion euros and expressed the fear that no government would dare take it back in better times.
Head of the Fiscal Council for measures similar to social assistance
Badelt, on the other hand, argued for a social assistance structure for inflation support on Wednesday morning. Targeted help must be given to people who can no longer afford everyday life.
This support should be limited to a few months and lifted when high inflation eases. When it comes to unemployment benefits, remember that while higher wages will raise them, they will only do so with a lag. That would be intercepted with a measure similar to the assistance.
A freeze of the rates would also make sense, especially the municipalities are in demand here. A price bank, as envisaged by the government, has a lot to offer, but can only be part of a total package.
Badelt is skeptical about government intervention in energy prices
Badelt is skeptical about state intervention in energy prices, because then the energy suppliers would have been subsidized, in principle the government’s way of combating the effects of inflation was correct – “but you should look at the causes of inflation, especially an increase where many need to be more careful, and at least you should be now – and please stop throwing money away,” said the Fiscal Council of the Republic and former head of Wifo and ex-rector of the Vienna University of Economics and Business Administration.
Government approves inflation package
The federal government will decide on a package against inflation in the Council of Ministers on Wednesday. The coalition announced this on Tuesday evening. The focus is on the areas of energy and food. Details are still under negotiation, Social Affairs Minister Johannes Rauch said in the ORF “Report” yesterday. Energy and food companies must be held accountable.
Inflation in Germany has fallen
As the German Federal Statistical Office announced on Wednesday, inflation in our northern neighbor fell to 7.2 percent in April. This is the lowest inflation rate since August 2022. In March it was 7.4 percent, in January and February it was 8.7 percent. By comparison Austria: In March inflation was 9.2 percent, in February 10.9 percent and in January 11.2 percent.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
