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The crown crisis will continue to put heavy pressure on the national budget in 2021. “New massive loans will also be needed next year,” Finance Minister Gernot Blümel (ÖVP) announced at an APA meeting without specifying figures. . This new “Crown budget” is necessary to be able to continue implementing the aid measures.
Consequently, fighting the crown crisis will also be the budgetary focus for next year. Regarding the medium-term outlook, Blümel said: “Perhaps towards the end of the legislative period we can get closer to meeting the Maastricht criteria again,” although this would be quite ambitious.
The budgetary criteria specified at the EU level foresee a new annual debt of less than 3% and a total debt of less than 60% of economic output. Austria has never complied with the latter since it joined the EU. New debt this year is likely to be 10.5 percent of economic output, and next year (according to Wifo’s forecast) 4.3 percent. The national debt should increase to 81 percent of annual economic output by 2024.
Ecosocial tax reform
Despite the coronavirus and its consequences, Blümel sees the “eco-social tax reform” agreed between the ÖVP and the Greens, which is supposed to reorganize the tax system more in the direction of environmental protection, still ongoing, although with a slight delay. “That will come because we have agreed to it. And what is in the government’s program also applies.” The task force created shortly before the outbreak of the pandemic should have developed specific control measures for the summer. However, due to Corona, there was not enough time to “work hard on it,” the department head said. So this is now changing a bit.
“Currently not planned” is an extension of the reduced VAT rate of 5% for the restaurant industry, which will apply until the end of the year. Blümel does not want to rule out an extension: “I became cautious in the crown crisis. Never say never.” For example, 400 million euros were originally agreed for part-time jobs and then had to be improved almost every week.
In any case, the EU Commission would need the green light to extend the VAT reduction. The Finance Minister was confident of any need: “If there is a need, I suppose the Commission cannot reject it.” (apa)
