Calls for reforms

IV boss: “No longer participating in global growth”

(Bild: reneknabl.com)

The IV would like to see a government in place quickly - and that government must quickly get Austria, which is currently only competitive to a limited extent, back on its feet. But what does the Federation of Austrian Industries (IV) think is Austria's problem? "We are no longer participating in global growth. We have priced ourselves out of the market," says IV President Georg Knill. 

He is referring to the costs of labor, energy and bureaucracy. Competitiveness no longer exists and there is a lack of political understanding. It's not about performance, the domestic economy is still innovative - it's about the price situation: "We are no longer participating in global growth." And: "Many of the people involved have not personally experienced a market economy," he says of the politicians. "They have always worked in protected markets or protected areas."

"Deindustrializationis taking place"
 "Deindustrialization is taking place." Investments are being cut back, orders are missing, employees can no longer be retained. "All of this is happening now. Unemployment in the manufacturing sector will probably continue to rise in 2025." There have already been above-average increases in the number of unemployed in this sector recently.

Georg Knill

(Bild: Zwefo)

"The economic and structural problems are ultimately fatal for prosperity and the welfare state," the IV boss points out. Industry accounts for a quarter of value creation and employment in Austria.

"Without structural changes and industrial reforms, we will not get out of stagnation," continued Knill. "We need a liberation from bans and regulations, both at European and especially national level. We need entrepreneurial and economic freedom paired with stable framework conditions again." But: "Politicians are not reliable. That is fatal." Investors would withdraw capital from Austria. The capital market should always be involved as a pillar in pension provision. Only recently, Knill demanded more speed from the government negotiators.

More early write-offs desired
For example, early write-off options would be important to make investments attractive again - and, according to Knill, without burdening the budget. "I hope something like this is adopted," he said about "100, 120 percent depreciation". Depreciation is used to spread the cost of an asset over its useful life, thereby reducing the tax base. "That would be great for companies that are still willing to invest in Austria."

"Unfortunately", the ÖVP proposals for labor market reform - keyword: degressive unemployment benefit model, which is to fall below 55 percent of the final salary after previously being slightly higher than before in order to create incentives to work - have so far been prevented by the Greens in the turquoise or black-green government, says Knill. Under no circumstances should the system become more expensive, as demanded by the trade union. The proportion of part-time work should also be reduced and more people should work full-time, Knill emphasized. Incentives are needed for this, as well as for working more overtime.