Second blockade: the government promises new aid – coronavirus

The government has promised new aid measures for the second “blockade.” As the Ministry of Finance budget balance for the first three quarters shows, aid from the previous crown is still lagging behind announcements, in some cases significantly. Of the ten billion euros planned for the “emergency fund” and the “fixed cost subsidy”, only 934 million euros have been disbursed to companies.

The emergency fund is intended to support small businesses and is endowed with two billion euros. According to the Ministry of Finance, only 675 million euros were disbursed (as of October 30). The “fixed cost subsidy” aims to offset part of the costs of the crisis for the largest companies, for which up to 8 billion euros are expected in the first phase. In fact, however, 258 million euros were disbursed. Finance Minister Gernot Blümel (ÖVP) recently justified this with the fact that most requests were only made after the fact.

Up to and including September, the federal government paid significantly more for part-time work (five billion euros) and for supporting the many additional unemployed (plus 1.5 billion euros). According to the Ministry of Finance, the government spent a total of nine billion euros more than in the first three quarters of the previous year. In contrast, revenues fell 7.7 billion euros, as a result of the economic crisis and tax deferrals (6.5 billion euros).

The figures announced by the Ministry of Finance via broadcasting cannot be reproduced in detail because the monthly report for September has not yet been published on the Internet. It is not clear, among other things, how much the tax quotas of the federal states and municipalities have fallen. For next year, the federal states will have to adjust to less than 15 percent (2,500 million euros less), the municipalities will have to manage with 12 percent less (1,300 million euros).

Part of this loss will be offset by additional federal funds for the municipalities. One billion euros are earmarked for this by the end of 2021. According to the Ministry of Finance, 74.8 million euros have been disbursed so far.

Including federal states and municipalities, Finance Minister Gernot Blümel (ÖVP) expects a national deficit of 9.5 percent of economic output this year. “Therefore, the budget situation of the federal government is not expected to ease in the coming months,” the finance minister said in a broadcast. The fight for health, employment and business has the highest priority.

The next new lockdown “will be tough on the economy,” says IHS chief Martin Kocher. But no new aid packages are necessary. It is more important to keep the stagnation as short as possible and return to normal activity as soon as possible, the economist said Friday night in the ORF “ZiB2”. This year, the economy could contract by up to one percentage point more than previously expected. But that still depends on the measurements and their duration.

The upcoming lockdown will have a negative impact on growth next year, according to Kocher. “It will be tough on the economy. The mood is clouding over.” But it is not necessary to prepare new aid packages, according to the economist. The measures planned so far would be sufficient for this. However, aid should reach those affected quickly and without bureaucracy. It is important to keep the stop as short as possible.

As in the conversation with the APA on Thursday, Kocher calculated that unemployment in Austria would rise to just over 500,000 people. More importantly, unemployment is not taking hold. There is no good alternative to an additional budget burden. Many bankruptcies and even more unemployed would be worse.