2023-09-14 21:06:06
Brunner, Kocher, Kraker, Badelt and Berger provide information
Vienna (PK) – High inflation and falling unemployment figures characterized the year 2022. This emerges from the 2022 federal financial statements from the Court of Auditors, which were published today Budget Committee was discussed alongside the 2023 productivity report, which was presented for the first time. Finance Minister Magnus Brunner, Economics Minister Martin Kocher, Auditor General Margit Kraker, Christoph Badelt, Chairman of the Productivity Council, and Helmut Berger, Head of the Parliament’s Budget Service, answered questions from the MPs.
Federal financial statement 2022: President of the Court of Auditors Kraker reports to the Budget Committee
With an increase of 8.6%, the highest price increase since 1974 was recorded in 2022, as the Court of Auditors reported in the 2022 federal financial statements (III-942 d.B.). The main price drivers included household energy, fuel, food and non-alcoholic beverages as well as catering and accommodation. Meanwhile, the domestic economy grew by 5% and the labor market recovered. The number of employed people rose by +3.0% and the unemployment rate fell by 1.7% to 6.3%.
As Court of Audit President Kraker reported in the committee, the federal budget recorded a high deficit of €-12.744 billion (net result) in 2022 for the third time in a row. However, the result was €6.901 billion better than in the previous year. Compared to the previous year, income increased by €7.948 billion in 2022, which is attributed to higher tax revenues due to high inflation and good economic development. However, the positive development was dampened by measures to cushion inflation, as reported by the Court of Auditors. According to the federal financial statements, the additional payments for relief measures amounted to €4.534 billion. The increase in the climate bonus together with the anti-inflation bonus (€2.734 billion) took up the largest share (60.5%) of the support payments. In the federal financial statements, the Court of Auditors draws attention to the high budget burden and recommends checking the measures for their sustainability.
The Court of Auditors also warns of interest rate risks for future budgets. The interest rate level has risen significantly over the course of 2022 and an end to the key interest rate increases by the European Central Bank is not yet in sight due to the still high inflation. With regard to debt, the audit body points out the need for a sustainable budget policy.
The federal government’s adjusted financial debt amounted to €270.890 billion or 60.5% of gross domestic product (GDP) at the end of 2022 and was therefore 6.8% higher than in the previous year. The measures to combat the COVID-19 pandemic led to a sharp increase in financial debt. Within three years – from 2019 to 2022 – the federal government’s financial debt increased by a total of €62.122 billion or by 30%. According to the Court of Auditors, this is a larger increase than in the previous twelve years (2007 to 2019). Due to the increase in financial debt and interest rates, the federal government’s total interest obligations, which would be incurred at the current level of debt until it is fully repaid in 2120, increased by €1.5 billion to €53.102 billion.
The report was accepted with a majority of votes from the ÖVP and the Greens.
Committee debate on the Court of Auditors report
Green MP Elisabeth Götze was interested in achieving the climate goals, which were not included in the report. Court of Audit President Kraker pointed out that the financial consequences of their prosecution could not yet be estimated and therefore they could not yet be listed in the federal financial statements. However, it calls for the achievement of climate goals, says Kraker.
Hubert Fuchs (FPÖ) addressed the regularity and documentary checks discussed in the report and asked why the proportion of inadequate documents increased to 10.1% in 2022 (2021: 6.6%). Kraker emphasized that these audits have been carried out extremely consistently in recent years and have also been supplemented by follow-up reviews to implement the Court of Auditors’ recommendations. Finance Minister Magnus Brunner saw his department taking a “path of improvement” and pledged to implement the Court of Auditors’ recommendations.
Karin Doppelbauer (NEOS) was interested in the issue of reserves, which according to her are at a high of €22 billion, and asked about ways to improve reserve management. From Brunner’s point of view, too, the reserves are too high and every effort will be made to reduce them, among other things, as part of the budget negotiations, he explained to the committee.
Regarding the excess liquidity mentioned by Hubert Fuchs (FPÖ), Margit Kraker suggested implementing the Court of Auditors’ recommendations to reduce excess liquidity and observing central liquidity management. As an expert from the Ministry of Finance confirmed, there was a high need for liquidity for subsidies to companies, especially in the first phase of the pandemic. However, in the current interest rate situation, liquidity should be kept as low as possible.
Furthermore, SPÖ MP Kai Jan Krainer discussed the Swiss franc liabilities of the Oesterreichischekontrollebank (OeKB), Karin Doppelbauer (NEOS) discussed the need for reform in budget law in her view and Christoph Matznetter (SPÖ) discussed the real wage development in recent years.
Productivity Report 2023
In the 2023 Productivity Report, the Productivity Council makes 47 recommendations to the federal government, urging rapid measures for the ecological and digital restructuring of the economy to strengthen Austria’s competitiveness (III-979 d.B). Investment, innovation, technological progress and improving the skills and abilities of the population are becoming increasingly important for economic growth, according to the report. The Productivity Council sees adapting the Austrian education system and eliminating known weaknesses, such as its social selectivity, as a priority area for action. In addition, a more ambitious research and innovation policy, the promotion of structural change in the corporate sector and an improved mobilization of the existing workforce potential are seen as important factors for strengthening Austria’s competitiveness.
However, the geopolitical situation, rising financing costs and bottlenecks in the labor market are mentioned as risks. Furthermore, the Productivity Council, which was launched in 2022, addresses the ecological and digital restructuring of the economy and recommends accompanying measures for the labor market, education and social policy. He sees high-quality child care as the key to better economic performance, and in the health sector he advocates strengthening preventive measures. In order to strengthen Austria’s economic competitiveness, the experts insist on supporting start-ups and strengthening company dynamics as well as promoting research and innovation.
In the committee, Christoph Badelt explained that the Productivity Council, which he chairs, does not pursue a purely financial or economic approach, but also includes social and ecological contexts in its expertise. He particularly addressed the role of climate change, demographic developments and the education system in Austria’s productivity development. In the latter area in particular, it is important to utilize untapped potential because, despite high expenditure on the education system, there are significant deficiencies in the end, says Badelt.
Christoph Matznetter (SPÖ) identified “social segregation” in the education system as a fundamental problem, which Badelt confirmed. He suggested that it should be targeted specifically at preschool and primary school ages, as this would also allow for an “influence” in families in which little would otherwise be invested in the children’s education.
Markus Koza from the Greens addressed the inequality in wealth distribution and asked Badelt about measures to reduce it. From a scientific perspective, there is no clear connection between wealth distribution and productivity, Badelt explained.
When asked by Gerald Loacker (NEOS) about the labor shortage, Economics Minister Kocher described it as “one of the most pressing challenges of the next ten years”. Kocher also emphasized the need to increase domestic potential through qualification measures, for example, but also to make Austria more attractive for foreign skilled workers.
As part of a discussion between Andreas Hanger (ÖVP) and Christoph Matznetter (SPÖ) about the development of real incomes and real wages, the head of the parliament’s budget service, Helmut Berger, referred to the relevance of data sources when assessing developments. Real incomes have increased due to support payments, particularly in the lower income deciles, but this may have “bargained” a higher inflation rate.
The report was accepted by the majority without the votes of the FPÖ and will be further discussed in plenary session at the request of NEOS. (Final Budget Committee) wit
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