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10. 02. 12. - 20:30

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10. 02. 12. - 20:30

Coalition at the ready to reveal cutbacks

The government plans to present its austerity package this evening (Fri), it was announced yesterday.

Social Democratic (SPÖ) Chancellor Werner Faymann and People’s Party (ÖVP) Vice Chancellor Michael Spindelegger will met with their ministers in the afternoon for accord regarding the various details of the planned measures before addressing the public later on.

Reports have it that the Federal Trade Union (ÖGB) will give the green light to the package which will mean dramatic changes to the budget for 2012 which was presented only in October. ÖGB and Labour Chamber (AK), which are both dominated by SPÖ officials, called for a reintroduction of inheritance taxes. However, the government coalition allegedly decided to reject the appeal.

The Federation of Industries (IV) and the Economy Chamber (WKO), which strongly influence decision-making processes in the ÖVP, claimed that the public budget could be restored by concentrating on efficiency and cutbacks. Both institutions called on the SPÖ-ÖVP administration to abstain from jacking up taxes. Nevertheless, the government is tipped to set up a 25 per cent tax on real estate sale profits. It is also understood to scrap farmers’ tax privileges. Agricultural sector businesspeople are currently freed from paying mineral oil taxes on petrol purchases.

Pensioners may have to accept modest increases ranging below inflation in the coming years. Only a few weeks ago, the government decided to raise pensions by 2.7 per cent. Now the coalition allegedly wants to ask people in retirement for higher transactions to social and health insurance institutions. SPÖ and ÖVP hope that this measure closes the widening equality gap between pensioners and the young middle class who – according to Austrian and international economists – pay excessive income taxes.

The government coalition is also expected to explain how it intends to raise the retirement age from the current average of 58. Law says that Austrian men must work until 65 except cases of severe sickness or invalidity. Women are obliged to stay active members of the labour market until they turn 60. Spindelegger recently revealed that no Austrian younger than 50 would soon be allowed to quit working due to invalidity. Unionists warned that such a general restriction would put the individual decisions and findings of doctors into question.

Experts see enormous savings potential in the Austrian public sector but civil servant works council leaders warned from launching a labour conflict if they were burdened by the planned cost reductions disproportionally. The government’s negotiators reportedly tried to get their approval for a pay freeze in at least one of the coming five years. Unionists announced after the talks that the meetings were nothing but information events organised by SPÖ and ÖVP, claiming that the parties did not offer them a change to argue their points.

The Social Democrats and the conservative ÖVP reportedly hatched out plans how civil servants could be asked to work elsewhere within the public sector. This endeavour could suffer setbacks due to guarantees in the staff’s contracts which protect them from being relocated. Creating more flexibility in the public sector would help the government to ensure that no new employees were assigned anywhere. Reports have it that schools, courts, police forces and institutions fighting financial felonies would not be affected by the planned freeze on hiring.

Austrian Times

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