Achieve 40% tax rate, end inefficient measures!

The current good economic situation is a tailwind for public finances, and the 2018/19 double budget benefits from this. "Nevertheless, it is a very disciplined budget. In the past, we have had several phases of economic boom in which the money tap remained open. Seen in this light, the double budget is a short-term signal for stable finances," says Tobias Thomas, Director of the economic research institute EcoAustria. In the long term, however, there are still major challenges: The national debt ratio will probably fall to the Maastricht criterion of 60 percent of gross domestic product by 2025, but it will rise again significantly from 2030 onwards without significant reform measures due to demographic trends. This development will be driven in particular by expenditure in the areas of pensions, health and care. "Political countermeasures must be taken here - in particular by adjusting the retirement age in line with life expectancy," says Thomas. Reducing the tax ratio to 40% is achievable and necessary, as every Austrian pays an average of around EUR 2,000 more in taxes and duties per year than their neighbors in Germany or the Netherlands, adjusted for purchasing power. It can be achieved by spending taxpayers' money more efficiently. "Austria, for example, spends more money on administration, schools and healthcare than comparable countries, but achieves poorer results. So there is potential for efficiency here," explains Thomas. A good example is the employment bonus. Calculations by EcoAustria have shown that for every additional job actually created, 26 would have been created anyway. Of the planned 2 billion euros earmarked for the measure, only 75 million would have been used in a targeted manner in the end.