At noon, Chancellor Karl Nehammer (ÖVP) and Vice-Chancellor Werner Kogler (Greens) presented a three-point program intended to defuse inflation: pressure on the energy companies to lower prices, transparency measures and more opportunities for the competition authority to put pressure on the supermarket chains and a freeze or reduction of public fees. The coalition also used EU guidelines to justify the fact that the direct intervention in prices demanded by the opposition does not exist.
SPÖ vice club boss Jörg Leichtfried accused the government of not lowering a single price in the supermarket with the measures. According to Leichtfried, the announced tightening of the excess profit tax for energy companies is nothing more than an admission that the previous one was merely an “excess profit tax”, and it is also much too vague. The planned price transparency in the food sector will bring exactly one thing, namely: “People will be better able to see how they are being ripped off.”
ORF Analysis: Measures against inflation
ORF reporter Peter Unger talks about the most important points of the package of measures against inflation. He explains how prices could change as a result.
SPÖ: Lower benchmark rents again
At the special session of the National Council on inflation on Friday requested by her, the SPÖ wants to apply for the withdrawal of the benchmark rent increase and a freeze on rents until 2025, as well as a reduction in VAT on staple foods.
FPÖ: “Beating around the bush”
FPÖ club boss Herbert Kickl spoke of a “beating around the bush”. According to Kickl, direct price interventions on energy and a reduction in VAT on food would have been necessary.
None of the measures presented will improve the financial situation of people in need in the foreseeable future. According to Kickl, the threat of a more rigorous skimming off of excess profits is a toothless tiger. Again, this government is not doing anything about the high food prices, rents, bank charges, etc.
NEOS: Government sends money in circles
According to NEOS spokesman Gerald Loacker, the government is sending the money in circles after having fueled inflation itself with its watering can policy. The federal and state governments have long been able to reduce the prices of the energy suppliers, the fees and rents for municipal housing. The package is “absolutely not guaranteed” that people will feel relief. Loacker called for a reduction not only in income tax but also in capital gains tax on savings.
Only trade association satisfied
Criticism also came from the ÖGB, which spoke of “cosmetic measures” and again called for a reduction in VAT on food. For the Chamber of Labor it is “too little, too late”. The trade association, on the other hand, was satisfied. The industrialists’ association warned against a tightening of competition law. The Chamber of Commerce referred to the problems, above all, of rising energy prices for companies.
“An intensification of the electricity contribution to the energy crisis is a political decision and must be accepted as such. The question of the exact implementation and what effect will be achieved with it is currently open,” said Oesterreichs Energie, the lobby of the Austrian electricity industry, in a reaction in the evening. The e-business sees this measure critically with regard to investment security. “In the medium term, prices will only relax through a massive expansion of generation and network capacities – this requires extensive investments – also from the private sector,” says the association.
The umbrella organization for renewable energies (EEÖ) sees the measure as a “fatal signal” for the industry and a “slowing down of the energy transition”. “A long-term and sustainable reduction in energy costs is only possible with a purposeful expansion of renewable energy in Austria,” it said in a broadcast. However, according to the association, the expansion of profit skimming planned by the government would have a negative impact on the investment climate. In a broadcast, IG Windkraft also identified a “black day for the energy transition”.
Praise and criticism from economists
The day before, WIFO boss Gabriel Felbermayr had already warned domestic politicians not to underestimate the consequences of high inflation and called for swift action. After the presentation of the package, Felbermayr generally responded with praise. All measures taken individually are correct. But he also emphasized that the package was not enough. Further measures will be needed, the government must “continue to improve”.
IHS Director Klaus Neusser does not expect the package to make a major contribution, but it will make a lasting contribution to curbing inflation. According to Neusser, there will be more pressure on energy companies and donations for social markets. He expects hardly any effect from the fee freeze.
Badelt: Special help for the needy
Similar to Felbermayr, head of the Fiscal Council Christoph Badelt described all measures as “reasonable, but it will not be able to stay that way”. In addition to the government measures, he called for cost-of-living compensation for those people who can no longer afford the costs of everyday life, such as food.
Specifically, people who are already receiving social assistance, but also those who have additional difficulties, should receive additional support over the next few months. A case-by-case assessment is to be used to determine whether someone is eligible. According to Badelt, such a measure could be implemented “within two to three months”, but in any case before the summer.
Caritas also called for measures specifically for people with low incomes, in particular a reform of social assistance and an increase in the compensatory allowance. And unemployment benefits and unemployment assistance should be increased to “poverty-proof levels”.
