Bungling is the trend

Undeclared work is considered a trivial offense in this country

(Bild: dapd)

Undeclared work is still at the top of the list of accepted "peccadilloes" in Austria - almost two thirds (63%) of Austrians think it is okay to have things done in a botched-up way. More than a third (37 percent) of the population also find nothing wrong with messing things up themselves. These are the findings of a representative survey commissioned by Linz-based economist and undeclared work expert Friedrich Schneider.

Austrians most frequently have electrical work and car repairs carried out by bodgers. However, beauty care and massages or work around the house and garden as well as tutoring are also popular areas of employment for bunglers.

High tax burden as a reason for undeclared work
Almost two thirds of those surveyed stated that a lot of work could only be done through bungling. Every second respondent cited the high tax burden as a reason for moonlighting. Only four percent believe that bungling should be reported. 79 percent of the 1,000 respondents believe that the state is wasteful with tax money.

Schneider estimates the volume of undeclared work this year at 34.5 billion euros, i.e. around 7.5 percent of official economic output. This is an increase of 1.25 billion or 3.8 percent compared to 2023.

Massages are also often "botched".

(Bild: thinkstockphotos.de)

According to Schneider, the shadow economy also serves as a buffer for income losses due to inflation and higher energy prices. Two thirds of the value added generated by bunglers comes from people who are self-employed or employed in an official job and pay taxes and duties, but do not pay tax on their "black" overtime. 16 percent of the added value generated by bungling comes from organized crime, for example in prostitution or construction, and 17 percent from the officially unemployed and early retirees.

Many houses would not exist without bungling
According to the economist, 40 percent of botched jobs would not even be in demand in the official economy and at official prices. Many houses and owner-occupied homes would not exist without botched work. In addition, two thirds of the money earned from bungling would flow back into the official economy in Austria.

Health insurance companies suffer from undeclared work
The biggest loser is the state, which loses 1.5 to 2.5 billion euros a year in taxes and, above all, social security contributions. However, according to Schneider, the tax losses are limited, as the money earned illegally is immediately spent again in the official economy. Another loser is the health insurance companies, which have to bear the higher costs due to additional accidents or incapacity to work caused by the bunglers.

As economic policy measures to combat undeclared work, Schneider proposes the continuation of the tax deductibility of household-related services and investments in the household to the tune of 2,000 euros per household per year. The craftsmen's bonus would reduce undeclared work by 900 million euros per year. Another effective measure would be a reduction in non-wage labor costs. Companies that work illegally or have people working illegally should be excluded from public contracts for three to five years.

Little undeclared work in international comparison
In a European comparison and measured against gross domestic product, there is little undeclared work in Austria. Only in the Netherlands and Luxembourg is the share of undeclared work in total economic output similarly low. In contrast, bungling is a popular sport in Bulgaria, Romania and Croatia, where the volume of undeclared work accounts for around a third of official GDP.