Experts assess the savings plans largely positively. But in the coming years, the next government urgently needs to save billions more. Structural reforms, for example in the pension system, should also not be taboo.
Blauw-Zwart wants to save more than six billion euros, with the two parties mainly adjusting their expenditure. Most economic researchers had also recommended this in advance. Both IHS head Holger Bonin and Wifo director Gabriel Felbermayr are cautiously positive about the plans. There are no major negative consequences for the economy to be feared. The state mainly saves on expenses that do not have a major impact on economic growth. There are also no plans for new mass taxes; these would have had a major impact on consumption.
Consolidation must take place over the years
“But this package can only be the beginning,” economist Bonin emphasizes. Billions more will be saved in the coming years. The three-way negotiations resulted in a gap of 18 billion euros that would have to be closed within seven years. Franz Schellhorn, head of Agenda Austria, criticizes that the 6.4 billion euros saved will only reduce the deficit to three percent, which is still too high. “There could have been more to it,” he believes.
The savings must now come exactly as planned, otherwise Austria will not achieve its targets. But there would be plenty of savings opportunities. Simply reducing funding to 2019 levels would generate eight billion euros annually.
The package also offers little space for lighting in some areas. But these are urgently needed, because the tax burden in Austria is extremely high. Both parties, the FPÖ and the ÖVP, promised lower taxes and costs for entrepreneurs during the election campaign.
Wifo boss Felbermayr also sees a lot of potential in subsidies: “You will probably need the famous chainsaw in a few corners in the bushes.” Bonin also emphasizes that the climate subsidies were too generous here and there. “In the case of solar photovoltaics, the subsidies hit a busy market.” The subsidies artificially increase demand, which also causes prices to rise, but at the same time there is a lack of capacity.
“Push back the watering can”
Economist Monika Köppl-Turyna also says that financing is not always the best tool to achieve a goal and that it must also be efficient. “Wherever the watering can was used, this should be reconsidered,” said the new Secretary General of the Chamber of Commerce, Wolfgang Hattmannsdorfer.
There should be no taboos; for example, measures are needed in the pension system, Felbermayr emphasizes. For example, pension benefits could be increased several times below inflation, after having previously been above inflation for years.
Questions about savings at the ministries
Bonin sees doubts about the ministries’ savings, which are expected to yield 1.1 billion euros. It is also difficult to estimate what consequences the end of the additional income limit will have for the unemployed, and whether the actual retirement age will actually rise as planned. Politicians focus here on behavioral changes: whether unemployed people will actually look for a job and not work illegally and whether retirees will actually retire later thanks to incentives for longer working hours is not certain.
AK criticizes: “Hit the weakest”
Criticism comes from the AK. Director Silvia Hruška-Frank sees an “unbalanced burden” for everyone: “The abolition of the climate bonus hits people with low incomes the hardest.”
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.
