In the first year of the pandemic, company assets increased by 4.4 percent, more than in the previous year. According to the OeNB study, bank balances and cash reserves have even increased by 17.5 percent – for comparison: in 2019 they only rose by 2.4 percent.
The numbers would have drawn through all sectors. Sectors that were badly affected by the crisis, such as tourism and gastronomy, also left with a larger financial cushion. For the study, 122,000 company balance sheets were evaluated and bank data analyzed.
“Support not sufficiently targeted”
The results are remarkable in that companies’ sales have declined in many industries due to the lockdowns. It would have been expected, therefore, that companies’ deposits and equity would have declined. The fact that this was not the case is due to state aid. The study goes on to say that consistently low insolvency rates can also be attributed to the aid.
The study’s concluding remarks stated that the available data suggested that “public support was under-targeted and likely to a large extent exceeded what was needed to keep the businesses afloat”.
Larger companies could build up more reserves
The study also sees a connection with the size of the company: Cash reserves would have increased more at larger companies. The deposits of the smallest fifth of companies, on the other hand, fell or stagnated. One can only see for larger companies whether aids reinforce this effect, since the data is not sufficient for smaller companies.
An improvement in transparency is therefore also called for in the OeNB study. This is the only way to understand the effects of political decisions on the economy. It is said that this would be indispensable for future crises in order to avoid the wrong distribution of public resources.
Court of Auditors saw “potential for overfunding”
Over-funding of companies has already been criticized from several sides, including the Court of Auditors (RH) in its report on the Covid-19 Federal Financing Agency (COFAG) of a “considerable potential for over-funding”. In total, state aid of 47 billion euros has been paid out in Austria since the beginning of the pandemic – the study states that Austria is at the top of the EU countries in terms of gross domestic product.
The head of the Economic Research Institute (WIFO), Gabriel Felbermayr, was also skeptical at the weekend – and questioned the government’s “watering can”, but not only with reference to the pandemic. At that time one could have “helped more effectively”, said Felbermayr in the ORF “Press Hour”. With regard to the energy crisis, he said that government aid measures are a crucial tool. At the same time, however, the sums are “already large”, although it might not have had to be so much if the watering can hadn’t been used so often.
SPÖ demands repayment from overfunded companies
SPÖ and NEOS took the study by the National Bank as an opportunity to criticize the CoV policy of the turquoise-green government. The government’s “watering can measures” are “an irresponsible destruction of tax money,” said NEOS budget and finance spokeswoman Karin Doppelbauer in a statement to the APA.
The SPÖ also sees a “systematic over-funding” that is at the expense of taxpayers. “The SPÖ has repeatedly pointed out that the Covid funding was not transparent and distributed incorrectly, which means that some companies, especially large ones, were able to obtain funding that was far too high,” said SPÖ business spokesman Christoph Matznetter. Companies that have been overfunded and made profits should pay back the money in the form of a special levy.
