The IV wants a government quickly – and must quickly get Austria, which is currently only partially competitive, back into shape. But from the Industrial Association (IV) point of view, what is the problem with Austria as a location? “We no longer participate in global growth. We have priced ourselves out of the market,” says IV chairman Georg Knill.
He is referring to the costs of work, energy and bureaucracy. There is no more competitiveness and there is a lack of political understanding. It’s not about performance, the domestic economy remains innovative – it’s about the price situation: “We are no longer participating in global growth.” And: “Many of the people involved have not yet personally experienced the market economy,” he says of politics. “They have always operated in protected markets or protected areas.”
“Deindustrialization is underway”
“Deindustrialization is happening.” Investments are being cut back, orders are missing, employees can no longer be retained. “This is all happening now. Unemployment in the manufacturing sector is likely to continue rising in 2025.” There have already been above-average increases in the number of unemployed people in this area recently.
“The economic and structural problems are ultimately fatal for prosperity and the welfare state,” says the IV boss. The industry is responsible for a quarter of value creation and employment in Austria.
“We will not emerge from stagnation without structural changes and industrial reforms,” Knill continued. “We need freedom from bans and regulations, European and especially national. We need entrepreneurial and economic freedom again, linked to stable preconditions.” But: “Politics is not reliable. That is fatal.” Investors would withdraw capital from Austria. The capital market must be fundamentally involved as a pillar of pension security. Only recently did Knill demand more speed from government negotiators.
More early depreciation desired
For example, early depreciation options would be important to make investments interesting again – and according to Knill without putting pressure on the budget. “I hope something like this will be taken up,” he said about “100, 120 percent AfA.” The wear and tear (depreciation) deduction spreads the acquisition cost of an asset over its useful life, reducing its tax base. “That would be great for companies that still want to invest in Austria.”
“Unfortunately” in the turquoise or black-green government, the ÖVP proposals for labor market reform – keyword: degressive unemployment benefit model, which should fall below 55 percent of the final salary, after previously being slightly higher than before to provide work incentives – are from The Greens have been prevented so far, says Knill. Under no circumstances should the system become more expensive, as the union demands. The part-time share must also decrease and more full-time work must be done, Knill emphasized. Incentives are needed for this, but also to work more overtime.
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.
