Pink relief?

NEOS promise significantly more net from gross

Beate Meinl-Reisinger's offer to the electorate: she promises ten percent more net from gross.

(Bild: APA/TOBIAS STEINMAURER)

NEOS leader Beate Meinl-Reisinger went out on a limb on Wednesday: if the Pinks come into power after the National Council elections, the party leader promises a significant increase in the accounts of workers and employees. However, employee associations are not very enthusiastic.

Meinl-Reisinger has launched her own party's "Entlastung" reform group, which includes NEOS members and a number of mostly liberal economists. The biggest problems are the tax burden, rising debt and a lack of efficiency in the health and education sectors.

The ÖVP, FPÖ, SPÖ and Greens have never tackled these issues, but the time has come to do so after the election. Then ten percent more net from gross would also pay off, says the opposition politician.

NEOS build on efficiency
To achieve this, Meinl-Reisinger told journalists in Vienna on Wednesday that it was not important to make savings on important services, but rather to introduce more efficiency in all areas of the administration.

You can watch the press conference here:

"Whatever the cost, there must be no more," Meinl-Reisinger said. "The next government needs to use tax money sparingly. The tax ratio must fall to 40 percent." Among other things, this should be achieved through greater efficiency and an end to duplicate structures for subsidies. "We need a brake on spending and costs and, above all, room for relief."

NEOS leader criticizes government
The non-wage labor cost share of the Family Burden Equalization Fund should be transferred to the normal state budget. In view of the high inflation, this would have been appropriate in order to prevent wage costs in Austria from galloping away for employers, which is already leading to the relocation of jobs to low-wage countries.

What are non-wage labor costs?

• What ends up in the account is the net amount.
• If wage tax and social security contributions, which are automatically deducted, are added together, the result is the gross amount.
• Non-wage labor costs, which are borne by the employer, are added to the gross amount. A "gross gross", so to speak.
• This includes social security contributions, family equalization fund and many other payments.
• How much of the reductions from the "gross-gross" is passed on to the employee is a matter for negotiation.

However, as is so often the case, the federal government has buried its head in the sand and left this difficult wage issue to the social partners alone, according to Meinl-Reisinger.

As a result, competitiveness has been severely compromised "through our own fault". "A clever finance minister, a clever chancellor should have created space here", said the Pink Party in the direction of Karl Nehammer and the outgoing Finance Minister Magnus Brunner (both ÖVP). The latter was also "very soft" in view of the immense increase in debt.

Criticism from employee associations
The Chamber of Labor (AK) and the Federation of Austrian Trade Unions (ÖGB) criticized Meinl-Reisinger's idea regarding non-wage labor costs. "A reduction in non-wage labor costs is a Trojan horse for working people. They pay double while employers benefit," said Ines Stilling from the AK. "Holes" in the social system are to be expected.

The NEOS are not prepared to take the criticism lying down:

ÖGB economist Miriam Fuhrmann explained, "The false claim that a reduction in non-wage labor costs will increase gross or net salaries does not become more correct through repetition."

However, Meinl-Reisinger promises that the cut will be felt above all in the pockets of working society. People are already noticing how much they are paying for education and health in taxes and contributions, while they are finding it increasingly difficult to get a doctor's appointment - or worrying whether their children are in good hands at a public school.

Other countries are catching up
"People have understood that things can't go on like this, but politicians haven't," she said in the direction of her political rivals. The "permanent excuse" of Brussels does not hold water either, as comparable countries are also in the EU and are in a much better position.

Taxes on labor are comparatively high in Austria: 

Austria was not necessarily getting worse, but others were catching up with immense speed. These are countries that are concerned with financial stability, efficiency in the health and education sectors, optimal use of resources and ongoing structural reforms, "which Austria has not done", said the NEOS leader.