“Now is the wrong time,” he said on Tuesday at an online press conference by “Diskurs. Das Wissenschaftsnetz” about possible savings. In the medium term, however, the debt ratio must decrease. The political scientist Ingrid Mairhuber described social benefits as “essential to democratic policy”.
“Debt is a problem,” admitted Bayer. The question, however, is when to start dismantling them. Low government spending could reduce economic demand and thereby deepen the recession, according to the former World Bank director. Because there would usually be savings in public investments and the welfare state. Savings should not begin in Austria before 2026.
“Investing instead of spending”
At the beginning of October, the Ministry of Finance increased its deficit forecast for the 2024 budget to 3.3 percent of gross domestic product. The value is above the EU debt rules (Maastricht criteria) of 3 percent. But these would also provide exceptions, said Bayer: “The EU requirements are not as strict as is often rumored.”
In addition to key figures such as gross domestic product (GDP), the social context and environmental factors must also be taken into account, demanded the economist. Because they are also indicators of prosperity. Benefits from the welfare state “should not be viewed as current expenditure, but rather as investments,” said Bayer. He recommended that the incoming federal government develop a “future strategy” and “only then talk about concrete savings.”
Important role in poverty prevention
Ingrid Mairhuber from the Research and Advisory Center for the World of Work (FORBA) emphasized the role of the welfare state in preventing poverty. The proportion of people below the poverty threshold in Austria is currently 15 percent. “Without social benefits it would be 44 percent,” emphasized the researcher. So it’s not just about the need of “a few people”. According to Mairhuber, social benefits should be raised above the poverty risk threshold of 1,572 euros per month.
It is also important to her to take unpaid work into account. The majority of work here is still done by women. “Financial dependence is structural,” said Mairhuber. She wants to give women “individual access” to income. This requires a better compatibility of wage work and social obligations, and more childcare and care options.