Setting the course for greater prosperity

Austria is currently only moderately attractive for foreign direct investment. A recent study by EY shows that the number of investment projects by foreign companies in Austria is stagnating. The EcoAustria Competitiveness Index (ECI) also shows that Austria's competitiveness has developed below the European average in recent years. Today, the index is below the level of 2016, the year of the last major tax reform. "In terms of competitiveness, there is room for improvement in Austria. Regardless of the outcome of the new elections in September, the future federal government should boldly tackle structural reforms to increase competitiveness and thus set the course for more growth and prosperity," says Tobias Thomas, Director of the economic research institute EcoAustria.

In addition to corporate taxation, a significant reduction in the burden on labor is particularly important for Austria as a business location. "The difference between what companies pay per hour worked and what employees receive is far too great in Austria," says Thomas. In addition, the already high tax burden in Austria will automatically increase without further structural reforms. This increase will be driven in particular by cold progression and rising public expenditure in the areas of health, care and pensions due to demographic trends. This would be counteracted by completely abolishing cold progression and linking the retirement age to life expectancy.