Austria’s Economic And Social Performance 2000-2006 Within A European Context

Andrea Grisold, Professor of Economics at the Vienna University of Economics, and Wolfgang Maderthaner, Director of the Austrian Society of Labor History, held a guest lecture on the economic and social performance of Austria during the “Schüssel government 2000-2006”.  During these years, a coalition formed between the “Österreichischen Volkspartei” (ÖVP) and the “Freiheitliche Partei Österreichs” (FPÖ) was in power.

Economic and social policies in postwar Austria were mostly shaped by the unique social partnership. Major decisions on economic and social issues were made in cooperation between the two major parties, the ÖVP and the SPÖ, the labor unions and the entrepreneurs.

This changed with the Schüssel government in 2000; an “erosion of the social partnership” set in due to the rough winds of global neoliberalism.

The two experts pointed to different policy fields -- e.g. family policy and tax policy -- and called the developments in these fields as “highly ambivalent”.

One major goal of the new coalition which came in power in 2000 was the reduction of the budget deficit. According to the experts, this goal was not fully reached.  It privileged entrepreneurs over common folks and eroded the welfare state.

While the European Union boosted the creation of new child care centers within the member states to facilitate the return of women into the labor market, the Schüssel government started paying bonuses to families for women to stay home. With regard to tax policy, the Schüssel government shifted the tax burden from businesses to labor. Entrepreneurs were granted a whopping tax relief of 2,7 billion Euros, while the social insurance contribution for employees increased, according to Grisold.

The two experts concluded that in spite of six years of Schüssel government, Austria still ranks as one of the wealthiest countries in Europe (measured by per capita income). But the welfare state suffered the most. The direction in which the new SPÖ/ÖVP Gusenbauer government is going, is not yet certain.