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28. 12. 11. - 18:00

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28. 12. 11. - 18:00

Government agrees on drastic savings package

Austrians will have to tighten their belts in the coming years as the government plans to save billions of Euros.

Social Democratic (SPÖ) Chancellor Werner Faymann and Vice Chancellor Michael Spindelegger of the conservative People’s Party (ÖVP) said yesterday (Tues) they planned to improve Austria’s budget by 10 billion Euros by 2016. Spindelegger explained the strategy was to spend two billion Euros less a year. It remains unclear whether tax increases are part of the coalition’s plan. The ÖVP wants to focus on cost reductions and less subsidies while the SPÖ calls for an open debate about new taxes.

Spindelegger said it had to be ensured that Austria would not suffer as a business location. He stressed that his party opposed all kind of new and higher taxation affecting companies. ÖVP whip Karlheinz Kopf announced it had to be ensured that the Austrian jobless rate would not soar. Around four per cent of people living in the country are out of work while Austria’s youth unemployment rate is around twice as high. Elderly people, women and immigrants experience significant difficulties finding work as well, according to researchers and statistics.

Spindelegger warned from staging a class struggle of words since such developments may tempt academics and managers to leave the country. The vice chancellor and foreign minister – who struggles in popularity polls compared to Faymann and Freedom Party (FPÖ) leader Heinz-Christian Strache – added that his party planned to reward people willing to work longer than they had to. He said those who could not be kept from retiring before the regular pension age should have to accept reductions of their pensions.

The ÖVP is focusing on Federal Railways (ÖBB) when it comes to where the Republic of Austria could slash its spending in the coming years. Forced to lower the soaring state debt, the ÖVP suggests reviewing various infrastructure projects carried out by the struggling company which has around 42,000 employees. ÖVP traffic issues spokesman Martin Bartenstein claimed his faction had no intentions calling on the railway company to pull the plug on tunnel construction activities. Bartenstein said experts should check whether the projects could also be carried out more efficiently. ÖBB receives around six billion Euros a year in liabilities and credits. It gets 560 million Euros to operate passenger trains on connections with little demand to ensure a comprehensive public transport service across Austria.

Faymann and Spindelegger announced yesterday they wanted to agree on details of the planned austerity package by February to pass it in parliament the following month. Both chancellor and vice chancellor pledged to abstain from commenting on various new ideas for new taxes in the coming weeks. Spindelegger added that Austria could not rest despite Moody’s recent confirmation of the country’s top credit rating of AAA. The ÖVP chief said that the government had to keep trying to reduce the budget deficit regardless of the pleasant news issued by the credit rating agency shortly before Christmas.

Only six Eurozone members have the best possible rating. Moody’s announced it appreciated the SPÖ-ÖVP coalition’s attempts to set up a constitutional debt limit as recently agreed by most European Union (EU) members. However, it remains uncertain whether the Austrian government manages to do so since it needs the backing of at least one opposition faction.

The FPÖ, the Green Party of Eva Glawischnig and Josef Bucher’s Alliance for the Future of Austria (BZÖ) reject the government’s latest draft bill. The debt limit was passed in parliament as a regular law with the simple majority of the government parties. President Heinz Fischer suggested the opposition could indirectly pave the way for a constitutional debt brake by abstaining from voting or leaving the room when the election was due. All three factions dismissed the idea of the former SPÖ science minister.

Austrian Times

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