Showing papers in "Austrian Economic Quarterly in 2005"

A New Revenue Sharing Act and a New Stability Pact for Austria – No Fundamental Changes

Abstract: The new Austrian domestic Stability Pact aims at the achievement of a zero deficit until 2008. At the federal level, the Maastricht-relevant deficit is to be reduced to 0.75 percent of GDP, states and municipalities together are obliged to obtain a surplus of 0.75 percent of GDP in 2008. The new revenue sharing agreement will not change fiscal relations fundamentally. The weight of shared federal taxes will increase; most of them will be distributed according to uniform revenue shares. The revenues of the smallest municipalities from the horizontal apportionment of shared federal taxes will increase. The states' strong dependency on intergovernmental transfers will not be reduced, the tax autonomy of the subnational levels of government will remain low.

The Socio-Economic Background of Health in Austria. With Special Emphasis on the Role of the Employment Status

Abstract: There are considerable differences in the incidence of sickness, the pattern of diseases and the duration of episodes of sickness by age, gender, education, and employment status. The employed have a significantly better health record than the unemployed. The analysis of health data of the European Community Household Panel (ECHP) and micro-census data suggest that this is at least partly the result of explicit screening of the employed by their health record. In the wake of micro-economic reform, structural change and cyclical downturns, persons with a bad health record are amongst the first to be made redundant. In addition, unemployment per se may act as a psychological stress factor and through that mechanism exacerbate health problems. This fact has to be taken into account when drawing up measures to reintegrate unemployed, particularly long-term unemployed persons, into the labour market.

Competition and Competition Policy in the Austrian Electricity Market A Critical Review Four Years after Market Liberalisation

Abstract: Electricity market liberalisation introduced in Austria four years ago initially brought the expected price reductions for both small and large users of electricity – but not more competition Due to unresolved homemade structural problems, liberalisation has left incumbent electricity suppliers largely unchallenged in their comfortable position as local monopolists Mergers of public utilities together with existing cross-shareholdings have contributed to a substantial increase of the market power of incumbents, thereby putting the economic benefits from market liberalisation seriously at risk A programme to stimulate competition is recommended to accelerate the long-delayed legal "unbundling" and institute a thorough review of the strategic alliances in the Austrian electricity sector

Budget Proposal for 2005: Tax Reform Causes High Public Deficit

Abstract: Summary The budget proposal for 2005 is mainly characterised by the tax cuts effected by the 2004-05 tax reform. Together with the budgetary effects of the stimulus pack-ages, which were introduced as a counter-measure to the weak economic growth during the past three years, they will increase the overall budget deficit to 1.9 percent of GDP. At the federal level, the budget deficit will reach 2.4 percent. Overall, the expansionary effect of the federal budget will be larger in 2005 than it has been in the preceding four-year period. While total revenues at the federal level will decline by 0.6 percent compared to the 2004 budget, total expenditures will rise by 2.1 percent. According to the budget proposal for 2005, the federal expenditure ratio will fall to 25.9 percent of GDP, and the revenue ratio will decrease to 23.8 percent of GDP. Federal transfer expenditures will gain in importance again: mainly because of surging family-related transfers, but also due to growing expenditure for old-age pensions. The tax reform of 2004-05 will bring about a reduction of federal tax revenues as well as a further shift in the composition of total tax revenues: the share of direct taxes in total taxes will decline to 45.8 percent in 2005, while indirect taxes will rise to 52 percent of total tax revenues. The tax reform will also reduce the tax burden on mass income to 11.6 percent. The government's long-term strategy to divest public enterprises and institutions is producing a long-term shift within federal expenditures, from expenditures for the provision of public services to financing expenditures. According to the budget proposal for 2005, financing expenditures will amount to about 57 percent of overall federal expenditures. Off-budget entities (spin-offs) are becoming more important at all levels of the state: their share in investment, employment and the national debt is continuously increasing. For the first time, initial steps have been taken within the budget proposal for 2005 to introduce gender budgeting, i.e., to perform a gender-sensitive analysis of budget policy.

Structure and Shape of Unemployment in Austria Since 1990

Abstract: In the 1990s, accelerating structural change went hand in hand with an ever brisker pace of employment dynamics and an increasing deterioration of traditional employment structures. Expressing this structural change, the rise in unemployment is specifically affecting those individuals who are at the beginning or end of their employment career, i.e., the young and the old, as well as individuals of low or medium qualifications. As a consequence, long-term unemployment is on the increase. Types of fragmented employment (mostly) excluded from the social protection schemes against unemployment pose new challenges for the residual safety net in the form of social assistance.

The Draft Federal Budget for 2006: Key Features and Trends in a Longer-Term Perspective

Abstract: The draft federal budget for 2006 is shaped by the impact of the 2004-05 tax reform and the persistence of high unemployment. The deficits (in the Maastricht definition) in the general as well as in the federal government households will therefore narrow only to a limited extent. Expenditure and revenue continue to fall as a ratio of GDP, both for the central and the general government. The share of transfer payments in total federal spending is rising once again, with family benefits posting the strongest increase. Since 2000, emphasis on the expenditure side has also been given to infrastructure and research. On the revenue side, one-off measures are losing in importance over time. The longer-term trend towards greater reliance on indirect tax revenues is becoming somewhat flatter in 2006.

Strategies for Higher Growth and Employment in Austria

Abstract: Economic growth is neither in Austria nor in the EU as a whole strong enough as to make substantial inroads into unemployment. Against this background, the European Council of last March assigned the highest priority to the goals of growth and employment and invited each member state to elaborate a national strategy for higher growth. The Austrian government has asked WIFO to submit, for a government summit early last May, a set of proposals for growth-enhancing measures for Austria. Action in seven policy areas as outlined by WIFO should be able to accelerate economic growth and ought to be integrated into an overall strategy.