By abolishing cold progression from January 1, 2023, Austrians should save 18 billion euros by 2026. Finance Minister Magnus Brunner (ÖVP) says he is “not a friend of superlatives”, but the law is historic. In the coming year, relief of 1.8 billion euros is to be expected, two thirds of which are to be returned directly and automatically to the taxpayers.
The abolition of the cold progression is the second step against inflation. The first effects of the high inflation are to be slowed down with emergency aid in the summer, but the situation can only be solved with structural measures, emphasized Brunner at a press conference. With the new law, cold progression will be “100 percent abolished,” Brunner said several times. The corresponding law is now under review. Two-thirds of the relief is to be returned directly and automatically to wage and income taxpayers. The other third, i.e. around 600 million euros in 2023, is intended to relieve the burden on employed persons and pensioners in particular. The federal government’s relief package is “quick, accurate and guiding,” says the green club chairwoman Jakob Schwarz.
The higher the inflation, the higher the relief from the new law, said IHS director Klaus Neusser. Inflation of almost eight percent is currently being assumed, so a possible gas supply stop has not yet been taken into account, according to Wifo director Gabriel Felbermayr. For 2023, Wifo expects net wage increases of 5.3 percent, while gross wages would only increase by 1.3 percent.
On the one hand, the opposition criticizes the two-thirds rule and, on the other hand, that the rule does not apply retrospectively.
Source: Nachrichten
