Budget restructuring: what measures could be threatened now

are cost drivers, he said in the “Business Journalists’ Club”. According to Badelt, if you want to reduce non-wage labor costs, a “reasonable inheritance tax” and a higher property tax should also be discussed.

For short-term restructuring as part of the EU deficit procedure, Badelt referred to the list of possible consolidation measures published by the Fiscal Council on Tuesday. The abolition of the family bonus, further tax measures such as sales tax and savings in pensions would be particularly effective. Badelt emphasized again that none of the measures were explicitly recommended, but: “It is to be feared that something will have to come from this list.”

“I believe this finance minister”

The fact that the budget implementation has recently been better than expected, like the Finance Minister Markus Marterbauer (SPÖ) announced at the end of January, Badelt considers changes in the pension and civil service sector to be credible in view of the changes in the pension and civil service sector that were not originally priced in. “You’ve noticed, I believe this finance minister,” said the head of the Fiscal Council in a swipe at former ÖVP finance ministers. However, one to two billion euros from the Fiscal Council’s list would still be needed for consolidation.

In the long term, something “really needs to happen now” for the former rector of the Vienna University of Economics and Business, who was only honored with a plaque of honor on Tuesday, especially in the areas of monetary social benefits, pensions and health. He is concerned that political negotiations in the reform partnership between the federal government and the federal states are not due to begin until the end of March. On the federal side, Badelt sees optimism here, but it is questionable how the state governors can actually be persuaded to jump over their shadows when it comes to health financing, for example. Because, says Badelt: “Any financing from a single source would of course be a dramatic disempowerment of the federal states.”

Costly federalism

From a purely intellectual point of view, Badelt believes that abolishing federalism entirely for economic reasons is “probably right”, but from an emotional point of view it is not realistic, since national identity is important to people. But the question is “how great the economic pressure has to be for something to happen”. Badelt’s expectations are low if the Freedom Party appoints the Chancellor: “If the FPÖ came to power, I don’t think a single one of these problems would be solved.”

He also criticized the statutory retirement age as a quasi-holy cow of social democracy. Badelt spoke of the “lack of intelligence of the opponents of a pension increase”, since it is suggested to current pensioners that something will be taken away from them if the retirement age is increased.

Regarding inheritance and property tax, he said that, in his view, this could be implemented “in principle immediately”, at least “as soon as it is technically possible”, if it were done in parallel with the relief of the labor factor, i.e. a reduction in non-wage labor costs. Under no circumstances should such taxes be used to plug short-term budget holes. Last but not least, Badelt also insists on EU-wide taxation of digital companies. It annoys him “that the billions are sewn in and don’t pay taxes.”