Austria: reforms will be necessary to uphold high well-being levels

vienna 2019_

(Credit: Unsplash)

This article is brought to you in association with OECD.


Austria stands out for its high levels of economic and social well-being. Preserving these will require reforms to improve competition in the service sector, increase access to risk capital for firms of all sizes, encourage more women and migrants into the workforce and lengthen work lives to reflect the ageing population, according to a new OECD report.

The latest OECD Economic Survey of Austria, presented in Vienna by the OECD’s Director of Country Studies Alvaro Pereira, projects GDP growth of 1.4% for 2019 and 1.3% for 2020. The 2020 projection is down from 1.6% forecast by the OECD in May, though the 2019 projection is unchanged, as recruitment bottlenecks, weakening external demand – especially from key markets Germany and Italy – and global trade tensions dampen Austria’s outlook.

The report’s key recommendations include linking the retirement age to life expectancy, which has risen steadily while Austrians are still retiring much earlier than the OECD average. The effective retirement age in Austria is notably lower than in neighbouring Germany and Switzerland. Austria’s labour participation rate is also low, especially among older women.

To increase the incentives to stay in work, the report recommends Austria do more to reduce its high levels of tax and social security on labour income, particularly for low earners, relative to most other OECD countries. This could be balanced by shifting to alternative sources of taxation such as environmental, consumption, inheritance and wealth taxes.

Reducing barriers to entry in key sectors ranging from service professions and specialist manufacturing to rail and freight transport and pharmaceutical distribution could bolster competition and economic dynamism. The small and medium-sized businesses that dominate Austria’s economy would benefit from greater access to venture capital and a better developed equity market. A reform planned by the outgoing government to address the debt-bias in the corporate tax system would help level the playing field between debt and equity financing.

The report recommends making access to quality childcare, early childhood education and all-day schooling for older children a legal entitlement throughout the country, to make it easier for new mothers to return to work and improve their career prospects. While this is a challenge given Austria’s geography, it would also contribute to more equal opportunities in the education system.

Austria has one of the highest shares of migrants in its workforce of OECD countries. This means migrants play an important role in meeting robust demand for labour yet the country also has a major challenge in trying to integrate low-skilled immigrants. Increasing the availability of language courses and adult skills training would help to address this.

The report also calls for Austria to increase its focus on environmental issues, for example by increasing carbon prices, which are low by international standards, and improving town planning to address the rising environmental impact of urban sprawl.

the sting Milestones

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Poliomielitis: climatic changes and impossibility in border control

Female African coders ‘on the front-line of the battle’ to change gender power relations: UN chief

1 in 4 Africans had to pay a bribe to access public services last year

Detecting online child sexual abuse requires strong safeguards

World is closer than ever to seeing polio disappear for good

Ending the era of dirty textiles

Sassoli to EU governments: Rise to the challenge. Find new shared ways to finance our recovery

Eurozone examines the prospect of issuing debt paper jointly

This heroic doctor is waging war on rape and the stigma around it

European Court of Justice to Google: It is #righttobeforgotten but not #righttoberemembered

Canada needs to increase foreign aid flows in line with its renewed engagement

Politics is failing to protect the Amazon. It’s time for finance to step up instead

‘Great Pacific Garbage Patch’ clean-up project launches trial run: UN Environment

How the institutional response to COVID-19 can prepare us for climate change

Here’s how community lending could help refugees find their feet

ACP-EU : Agreement on climate change, migration and post-Cotonou

Humanitarian Aid: €64 million for most vulnerable in Southern Africa

Antitrust: Commission consults stakeholders on a possible new competition tool

Medical students: The need for emigration

Charlotte in Ghana

Anti-Semitism ‘toxic to democracy’, UN expert warns, calling for better education

UN health emergency committee to re-convene on global threat posed by China coronavirus

Burnout is a pandemic. Why don’t we talk more about it?

“We have to do a better job of creating alternatives to violent extremism”, US Secretary of State John Kerry from Switzerland; the Sting reports live from World Economic Forum 2015 in Davos

More hiring freedom can reduce teacher shortages in disadvantaged areas

UN Mission in Afghanistan gravely concerned about ill-treatment of prisoners by Taliban, following first-hand testimony

COP25: UN climate change conference, 5 things you need to know

The banks dragged Eurozone down to fiscal abyss

This is why AI has a gender problem

Financial stability: Commission addresses risks of Libor cessation

Tigray conflict: EU humanitarian support to Ethiopian refugees reaching Sudan

For how long and at what cost can the ECB continue printing trillions to keep euro area going?

The movement of anti-vaccers: taking humanity back 200 years

How to unleash the potential of regions like São Paulo

What will it take for the world’s third-largest economy to empower women?

Drinking coffee could help you live longer, research finds

Humanitarian aid: €24.5 million in Southern Africa and Indian Ocean region

This young scientist is tackling food insecurity for the world’s most vulnerable groups

EU countries invested €5 trillion abroad

Mergers: Commission approves GlaxoSmithKline’s acquisition of Pfizer’s Consumer Health Business, subject to conditions

UNICEF urges ‘transformative shift’ in family-friendly work policies to reap ‘huge’ benefits

Economic growth ‘exceeds expectations’ but trade tensions are rising: UN report

Parliament elects Ursula von der Leyen as first female Commission President

State aid: Commission approves €380 million German rescue aid to Condor

Happy workers are more productive, research shows

Aid Programme for the Turkish Cypriot community: Commission adopts second Action Programme for 2020

These 5 countries plan to slash their CO2 emissions. But how will they do it?

There are 3 barriers blocking good menstrual hygiene for all women. Here’s how we overcome them

Here’s how India can soar in the Fourth Industrial Revolution

ECB indicates south Europeans can endure more austerity

Let’s Learn

Electronic cigarettes, a better alternative or a well-advertised product

The miserables and the untouchables of the economic crisis

New UN agriculture agency report underscores value of fishing in fight against global hunger

What is the IMF telling Eurozone about fiscal and banking unification?

‘Grave consequences’ await if new deadly escalation of violence in Gaza continues – top UN official

Europe bows to Turkey’s rulers, sends Syrian refugees back to chaos

Eurozone: Subdued inflation can lead to more recession

UN updates guidelines to ensure successful return to civilian life for former combatants

World ‘off track’ to meet most Sustainable Development Goals on hunger, food security and nutrition

More Stings?

Advertising

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s