Here in the livestream – inflation: government presents billion-dollar package

The new package should reach a volume of around EUR 28 billion by 2026, it said on Tuesday. The measures will be implemented in a three-stage process: in the summer, the people most affected by inflation, namely those on low incomes, are relieved of the burden. In the autumn a large part of the population should feel the relief and early next year “structural relief” should provide a noticeable boost in purchasing power. In addition, a package is being put together specifically for agriculture.

The measures in detail:

• 300 Euro for groups that are particularly affected, such as the unemployed and the minimum pensioner.
• 500 euros each 250 euro climate bonus and 250 euro bonus for all adults (half for children)
• the planned CO2 tax will be postponed until the autumn to ease the burden on companies.
• 180 euros once per child as part of the child benefit in August to make the expensive start to school easier for parents.
• rather the family bonus and increase in child benefit
• extension of eviction protection
• Of the “digital check” for students will be extended until 2024.
• Of the tax-deductible will be increased for 2022.

According to the federal government, all the measures just mentioned should come into effect this year, including an initial compensation of five billion euros. Further immediate measures are mainly intended to relieve the economy, such as an electricity price compensation, a tax-free employee bonus of 3000 euros and a direct subsidy for energy-intensive companies.

Structural measures should then increase purchasing power by 2026, including the much-cited abolition of cold progression, a valuation of social benefits, i.e. an adjustment of social benefits to inflation and a reduction in non-wage labor costs, which are high in Austria due to international standards.

Nehammer: “Historical abolition of cold progression”
Nehammer said that inflation is “a problem that has haunted us for months.” It is therefore necessary to give people security again and to absorb the consequences of inflation. Rising inflation is also “a stubborn opponent of politics” – and not just in Austria. That’s why people want to “return the money that inflation has taken from them”. Nehammer described the abolition of cold progression as a “historic step”. This should ensure “that the money stays with the people”, even if costs continue to rise.

Kogler rejects mineral oil tax cut
Vice Chancellor Werner Kogler (Greens) said we are currently experiencing a “turning point” that makes it necessary to help people and fight the causes of inflation. One is faced with “fossil inflation”, therefore only the exit from fossil fuels is sustainable in the long term. The presented package aims to relieve people “exactly and as well as possible” without giving the wrong incentives. Kogler continued to reject a cut in the mineral oil tax, saying it was decided to relieve commuters instead.

Finance Minister Magnus Brunner said Austria, as a small economy, cannot deal with the consequences of increased inflation on its own. However, it is a “question of fairness” that cold progression is abolished and the state no longer benefits from it. Brunner spoke of a system change, even though it would be “more convenient for a finance minister not to do that”. But it is not the “time for comfort”, but it is time to relieve the population.

Social Affairs Minister Johannes Rauch said inflation has “actually gone into the pockets of Austrians”. The figures are clear, even the ‘middle of society’ is affected. The shelter package therefore offers “fast and sustainable help for everyone who needs it”. The measures would also combat and prevent poverty in the long term, especially child poverty. Rauch described the valorization of social benefits as a “milestone”.