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02. 02. 12. - 20:30

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02. 02. 12. - 20:30

SPÖ bullish about taxing the rich

Josef Ackerl appealed to fellow Social Democrats (SPÖ) to keep fighting for a millionaires’ tax.

The head of the SPÖ’s Upper Austrian department said after yesterday’s (Weds) federal party board summit that his faction should be more courageous when it came to calling for higher income tax rates for the rich and a tax on assets. SPÖ Chancellor Werner Faymann, who is under pressure by the Labour Chamber (AK) and the Federal Trade Union (ÖGB), reacted by making clear that the upcoming savings package "must reflect our (the SPÖ’s) ideals".

AK and ÖGB call for a tax on assets while the People’s Party (ÖVP) wants to end the debate about which taxes could be increased. ÖVP General Secretary Hannes Rauch said yesterday Austria "needs a reform boost" instead of higher tax burden. Faymann promised to the SPÖ’s left-wingers already last year that he would not stop speaking out in favour of a more socially balanced tax system to avoid increasing pressure on workers and the middle class.

Rauch and ÖVP Economy Minister Reinhold Mitterlehner accused the SPÖ of engaging in a class struggle. Mitterlehner warned that the government coalition had no other option but to agree on the final details of the savings package soon. "No one wants to hold an election campaign with this issue not being sorted," the minister said earlier this week, already referring to the upcoming federal ballot scheduled for 2013.

Polls show that the Freedom Party (FPÖ) would overtake the ÖVP for second place in elections at the moment. The right-wing faction even has chances to beat the SPÖ for first place while its right-wing rival, the Alliance for the Future of Austria, may garner too few votes to take the four per cent hurdle into parliament. The party, which was founded by late FPÖ chief Jörg Haider in 2005, bagged 10.7 per cent in the most recent federal ballot around three and a half years ago.

The FPÖ strongly benefits from the escalating arguments of SPÖ and ÖVP as a rising number of people is angered by the government’s failure to do more than muddling through. The Greens struggle in public opinion polls despite the worsening climate between the coalition parties’ debt brake project negotiators. Vienna Greens Councillor David Ellensohn said today the ÖVP should stop trying to avoid the creation of a tax on assets. SPÖ Burgenland Governor Hans Niessl risked a rift between his party and the conservative faction of Vice Chancellor Michael Spindelegger by labelling the ÖVP as a "representation of Austria’s millionaires".

ÖVP officials appealed to the SPÖ to show more ambition and creativity in trying to raise the public sector’s efficiency. The state’s budget could be restored within the coming years if the government carried out courageous structural reforms, according to Economy Chamber (WKO) President Christoph Leitl and Veit Sorger, the head of the Austrian Federation of Industries (IV).

Austria may have to pay higher interest rates on its debts in the coming months due to its rising debts. The current economic developments could also make government bonds more expensive. Statistik Austria found last week that Austria’s budget deficit was 3.3 per cent in 2011. The finance ministry initially feared a rate of 3.9 per cent of the gross domestic product (GDP). Statisticians said the rate was lower since the state raked in more taxes than assumed.

The International Monetary Fund (IMF) and the Organisation for Economic Co-operation and Development (OECD) said Austria should reduce the tax pressure on labour. The state took in 21.6 billion Euros by charging taxes on salaries last year, 3.9 per cent more than in the year before. Think tanks and economists criticised that lawmakers spent too low sums on measures which could help scale down the country’s bloated bureaucracy. Experts also highlight the urgency of health sector reforms as a fund set up by the federal government in cooperation with the provinces covers costs only until 2014.

Austrian Times

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