Policy Note 20: Champions League in terms of expenditure, midfield in terms of performance
At 43.4%, the tax ratio in Austria is significantly higher than the average for the EU28 or the eurozone. This puts a strain on the consumption options of private households and companies in international competition. "Austria has less of a revenue problem than an expenditure problem. Many countries in the EU achieve or even exceed Austria's level of performance with significantly less expenditure," says Tobias Thomas, Director of the economic research institute EcoAustria. This applies, for example, to the quality of public administration, the education sector and the health of the population.
Adjusted for purchasing power, Austria, for example, spends 824 euros per capita per year on administration. In Denmark it is 536 euros and in the Netherlands only 479 euros. However, both countries achieve better scores in the World Governance Index of the World Bank in terms of administrative quality. If Austria were to use the funds there as efficiently as the Netherlands, for example, there would be an efficiency potential of up to EUR 3.6 billion without having to reduce the current level of services. There is also a gap between expenditure and performance in education. Adjusted for purchasing power, Austria spends EUR 9,380 per year per child up to the age of 14 on education. In Finland it is only 7,690 euros and in Poland only 4,215 euros. However, both countries are ahead of Austria in the PISA test. If Austria were to use its funds in education as efficiently as Finland, there would be an efficiency potential of up to 2.8 billion euros. Similar results can be seen in the health and social sectors. The European Union's "Social Protection Committee" came to the conclusion that an efficiency potential of around EUR 4.3 billion could be raised in social spending in Austria without having to reduce the current level of benefits.
The results show that there is significant potential for efficiency in public spending in Austria. If these can be leveraged, at least in part, expenditure could be reduced considerably - without lowering the level of services, according to the conclusion of an EcoAustria Policy Note published today
