Hans Jörg Schelling presents "Pact for Austria"
Before 400 guests, Schelling presents concrete measures aimed at taxpayers, Austria as a business location and the Austrian economy
Austrian Finance Minister Hans Jörg Schelling describes his plans for 2017 and the years thereafter as a "work programme instead of an election programme", and he presented these plans today within the framework of a "start-of-the-year" event at the Austrian Ministry of Finance. In front of approximately 400 guests from the worlds of business, finance and banking, in a speech lasting around one hour, the Finance Minister sketched out his approach in the battle against unemployment, his effort to revive the economy, to reduce bureaucracy, realign the budget and modernise the administration. "Many problems are well known, and the solutions are already evident. All we need to do is implement them," declared Schelling, who accompanied every proposal with a timetable. Thus, for instance, a whole range of measures could be implemented as early as in the spring, while others could be accomplished during the course of the year, and major reform projects beyond the end of 2017. Schelling's programme is accompanied by a crystal-clear declaration: "No new taxes. No gift tax. No inheritance tax. No wealth tax. And no sales tax or machine tax either."
At the focus of Schelling's speech was policy for the location of Austria and easing the burden on the economy. Based on the motto "What is good for the country and what is good for the people?", Schelling presented a whole range of areas of work: the acceleration of official processes, modernisation of the labour inspectorate, abolition of the aggregation principle in administrative criminal law, and orientation of the tax administration as a service partner. He also listed more flexible working time, task-oriented and training-based remuneration, expansion of the combined pay model, changes in the terms governing reasonableness, and sanctions in the event of refusal to work. "Measures in all these areas will introduce dynamism into the labour market and will finally acknowledge that which is needed, namely the will to achieve," added Schelling.
As a key department, the Austrian Ministry of Finance will assume a central role. Following the tax relief which became effective a year ago, Schelling is demanding a further simplification of the tax system. A significant component of further tax reduction consists of removing so-called "bracket creep". "Abolishing bracket creep must benefit all taxpayers. It is not an instrument of redistribution. Work must be rewarded, and so must the creation of tax yield," explained Schelling. In addition, the Finance Minister also aims to relaunch the system of foundations. "The foundation was originally a great success, introduced by a Finance Minister from the Austrian SPÖ, but, as a result of statutory changes, it has lost its competitiveness and is too expensive. We therefore needed to structure it more favourably and more flexibly. Hundreds of thousands of jobs are at stake here." In general, Schelling promised greater legal certainty in terms of tax laws, such that companies which base themselves in Austria do not need to worry about retroactive tax regulations. "The economy and your businesses ensure jobs, and we must offer business the service of planning certainty so that they in turn are able to ensure the required economic upturn and the required employment," declared Schelling. "For although, until a few years ago, we were the best in Europe as far as employment is concerned, and we increased funding for the labour market on a huge scale, we have fallen a long way," he admitted. "We cannot continue distributing money indiscriminately without questioning whether our social system is properly targeted," stressed the Minister.
In this connection, Schelling also referred to a new budget process which will provide in future for the budget and fiscal framework to be generated in one step: "In this way, we will save an enormous amount of bureaucratic expenditure, and the different departments will gain greater planning certainty."
With regard to the current fiscal framework, Schelling proposed to the federal government that, up to 2020, 5% of the budget, or EUR 3.8 billion, should be saved in order that approximately one third of this could flow into future investments. "Together we can submit all our areas of work to detailed analysis and thereby save money."
"To do this, we need a Pact for Austria which stands on a stable and broad basis and enjoys general approval. For this reason, I invite not only the government, but also stakeholders and all other political parties to join in. It is important, that, as a government, we also convince the opposition of our ideas in order to create a broad consensus. We have to get away from only thinking as far as the next election day. Whoever says "A", must also say "B"; we need to implement instead of only ever making announcements. Let us make 2017 the year of reforms, and let us prove together that this government is far better than has so far been claimed," declared the Finance Minister, concluding his presentation of a "Pact for Austria".