She wants to achieve this, among other things, through savings in unemployment insurance. Specifically, the People’s Party wants to reduce the net replacement rate (currently 55 percent) to below 50 percent depending on the time, according to a paper available to the APA. It leaves open what value the People’s Party wants to start from.
In the turquoise-green federal government’s unemployment reform project that failed in 2022, a specific value was mentioned here: they wanted to start with an increased net replacement rate of 70 percent, and following three months it should then be 55 percent. In return, there would have been no unemployment benefit for the first seven to ten days without employment, which was ultimately one of the reasons for the Greens to reject the degressive model. For the ÖVP, all of this doesn’t go far enough: it wants to go below the previous 55 percent unemployment benefit, based on the net income previously received.
The possibility of part-time employment should be eliminated
And: The possibility of part-time employment while receiving unemployment benefits should be eliminated, “so that everyone who can work can also do full-time work,” as the ÖVP paper says. The coalition model only envisaged a significant restriction on additional income – and that was already rejected by the green coalition partner. All of this is intended to reduce spending on unemployment benefits and increase income through taxes and social security contributions.
In order to finance the reduction in additional wage costs (according to ÖVP calculations it costs around 0.75 billion euros per half a percentage point), the People’s Party wants to reduce contributions to unemployment insurance. There is potential for savings, as surpluses are currently being generated here. She wants to increase the share of the federal budget in the financing of the family burden equalization fund (FLAF) and thus relieve the burden on companies. Together, this should bring in more than 3 billion euros by 2028 alone, according to the ÖVP, with an increasing trend until 2030.
The budget should be relieved
Overall, the People’s Party wants to achieve a reduction of 1.1 percentage points in non-wage labor costs through structural measures in unemployment insurance by 2030, while reforms such as the reduction in the net replacement rate should bring in 0.8 percentage points. The aim is to get a further 0.6 percentage points from FLAF, which would ultimately mean a reduction of 2.5 percentage points by 2030.
By reducing the Austrian funding rate to the EU average, the budget should also be relieved by 3.5 billion euros per year. In addition, the reduction in non-wage costs should also pay for itself through a “return to solid economic growth”. The People’s Party refers to the liberal economic research institute Eco Austria, according to which reductions in additional wage costs had a self-financing rate of over 60 percent. Money into the state treasury should also bring restrictions on immigration into the social system and incentives for voluntary longer working hours.
