Criticism of ÖVP plans

Cut unemployment benefits? Criticism of ÖVP plans

Social Minister Rauch (Greens) thinks little of the plans of the grand coalition partner ÖVP.

(Bild: APA/EVA MANHART)

A turquoise-green reform of unemployment benefits failed more than a year ago. Now the ÖVP is presenting a model with harsher cuts: It envisages a cut to below 50 percent. The plan has met with resistance from the opposition and the small coalition partner.

The ruling People's Party wants to finance the planned reduction in non-wage labor costs by 0.5 percentage points per year until 2030 with savings in unemployment insurance - as reported by the "Krone".

Specifically, unemployment benefits are to fall from the current 55 percent of the last net income to below 50 percent after a certain period of time. The ÖVP's starting point and the time frame for the reduction remain open.

Chancellor Karl Nehammer's plans have met with widespread rejection.

(Bild: APA/MAX SLOVENCIK)

In the reform project that failed at the end of 2022, the plan was to start with an increased net replacement rate of 70 percent, after three months it was to be 55 percent. In the first seven to ten days without employment, there would have been no money at all - one of the main reasons why the Greens ultimately rejected the model. Another was that the People's Party wanted to significantly restrict the possibilities for additional earnings.

Now the ÖVP wants to completely abolish the possibility of marginal employment parallel to receiving unemployment benefit, "so that everyone who can work can also pursue a full-time job", as the paper states. In addition to providing more incentive to take on a full-time job, the conservatives expect the measures to generate more revenue to finance the reduction in non-wage labor costs.

The ÖVP wants to increase poverty instead of halving it.

SPÖ-Klubchef Kucher

Bild: APA/EVA MANHART

Criticism from the SPÖ, FPÖ and Greens
SPÖ party leader Philip Kucher stated in a press release that "the ÖVP wants to increase poverty as a farewell gesture instead of halving it as promised". Unemployment benefit in Austria is already extremely low by international standards and the SPÖ is against people who generally do not choose to be made redundant being sent into poverty immediately.

FPÖ Secretary General Michael Schnedlitz and Social Affairs Spokesperson Dagmar Belakowitsch said in a press release that the ÖVP under Chancellor Karl Nehammer was "just socially cold": "We Freedom Party members already rejected this proposal during the government negotiations in 2017. The fact that the blacks are now digging up their anti-social booze idea from the 'poison kitchen of the ÖVP economic association' speaks volumes."

Social Minister warns of poverty risk
Social Minister Johannes Rauch (Greens) emphasized the different approaches of the two coalition partners on the sidelines of the Council of Ministers on Wednesday. With the Greens, "we cannot get into regions where there is a risk of poverty" when it comes to unemployment benefits and unemployment assistance. Social spokesman Markus Koza argued similarly, warning that the ÖVP plan would fall on the head of society as a whole.

The trade union demanded more rather than less unemployment benefit. ÖGB Federal Managing Director Ingrid Reischl called for an increase to 70 percent "instead of making the poor even poorer". Nine out of ten unemployed people were already living below the poverty line because they could not get by on just under half their previous net income. The Communist Party of Austria (KPÖ) went even further: it demanded an 80% net replacement rate.

I have the impression that the ÖVP is adjusting itself, which it has not done in recent years.

NEOS-Chefin Beate Meinl-Reisinger

Bild: APA/TOBIAS STEINMAURER

NEOS: demand for years
The NEOS also showed little enthusiasm for the proposal, albeit for different reasons. "It's nice that they realize on the evening of their political career that they have to do something," said pink economic and social spokesperson Gerald Loacker at a press conference on Wednesday. Party leader Beate Meinl-Reisinger recalled that the NEOS had been calling for this "for years". "I have the impression that the ÖVP is adjusting itself, which it has not done in recent years." The NEOS are in favor of a degressive unemployment benefit, i.e. a higher amount at the beginning, which then decreases. This is "the international standard today", says Loacker. The current discussion is too one-sided for him.