Vienna, 02 January 2012 Fekter: "We need to make reform and structural changes that will chart a course of savings for the long term”

“Just collecting taxes will not be enough”, Austrian Finance Minister Dr. Maria Fekter affirms. “There are many ways, in various areas, of approaching the problems we have in terms of structure and reform”, she stated in comments on the current discussions surrounding the need to reduce the deficit.

Clearly, budget consolidation at the level of expenditure is where the government’s emphasis now lies. The main task, Dr. Fekter says, is to achieve “intelligent savings measures”, i.e. not to focus on cuts to items that represent central investments for the future, but rather to focus on where the inefficiencies lie: Early retirement, the Austrian federal railway ÖBB , the healthcare system, subsidies and the public administration. “Early retirement must cease to be attractive, the de facto retirement age needs to increase substantially. There is also a lot that needs to be done in respect of public subsidies. There are areas where double and triple subsidies are being paid because the federal government doesn’t know what the Austrian Länder and municipalities are already funding, and vice versa. All of these points – and others besides – are currently areas of intense work ”, Fekter confirmed.

As regards the somewhat weakened economic climate, the Finance Minister would counter critics as follows: “Of course, the overall package is premised on two goals: Not choking off the economy, and preserving jobs. No consideration will be given to anything that would harm Austria as a prime business location or would inhibit investment here. What we want is an intelligent programme of savings, not a radical shutdown, because that would bring the economic motor to a halt.”

However, Finance Minister Dr. Fekter said that she did not want to discuss tax policy until such time as the government has finalised its austerity strategy. “We first have to find the holes in the budget and close them off before we pump any more money into the budget”, Fekter stated. She also stated that the government does not want to put any further strain on private taxpayers. “The levels of tax in Austria are already excessively high. There is hardly any other country in the world that taxes its citizens as much as Austria in terms of starting income levels and overall tax rates”, Dr. Fekter emphasised, referring to her decision not to resort to increasing taxation.

Nevertheless, Dr. Fekter does see the need to make improvements to the Austrian tax system: “We need to look at where there are tax privileges, tax shelters and tax loopholes that are being used extensively, and we need to close them.” She stated that for this reason, the government is working very hard on reforming its tax structure, in order to optimise the Austrian tax system. “We have to modify the system in such a way that we can achieve sustained savings and eradicate inefficiencies.”

All of these actions should, she said, be taken with a view to achieving a zero deficit in the shortest possible time. “This is the only way we can secure a sustainable future for Austria and ensure its economic viability over the long term”, Dr. Fekter stated in closing.