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Kocher has envisaged a panel of experts for next week. If the social partners are interested, there could also be a meeting with them. There are no plans to reduce VAT on groceries. Rather, the government wants to promote the free market and transparency.
Kocher and Brunner put the fact that inflation is lower in other EU countries into perspective. After all, government measures have increased purchasing power, and there have also been above-average wage agreements in Austria. The wage agreements are based on the inflation of the past twelve months, which was higher in Austria than in other countries, as confirmed by IHS Director Klaus Neusser.
“We are all aware of how stressful the situation is,” explained Kocher at the beginning of a press conference today. But Austria is also registering more economic growth, which is driving up prices. It is positive that energy prices and producer prices are declining, which has the potential to impact on end customer prices. A price commission, as demanded by the opposition and employee representatives, is not helpful, said Kocher.
Price transparency is effective, and the fuel price database could serve as a model here. However, the economics and finance ministers did not name any concrete measures. According to the Economics Minister, it is difficult to compare prices, especially with heterogeneous products, for example between organic and non-organic products. In any case, Kocher wants to sit down with economists and the Federal Competition Authority (BWB). There is no date for this yet, it is planned for next week. Meetings with the social partners are also possible if they so wish.
“Away from the Nanny State”
Finance Minister Brunner pointed out that household incomes in Austria had risen by three percent, while they had fallen in other countries with lower inflation. “The purchasing power is there, it’s different than in other countries,” said Brunner on Thursday morning. It is now a matter of evaluating the effect of the measures.
Countries like Croatia and Slovenia have higher inflation than Austria despite the introduction of price caps. Regarding a reduction in VAT on groceries, Brunner said that this “is not necessarily effective” because it may not be passed on to customers. Furthermore, Brunner repeated his opinion that Austria must “get away from the nanny state” and that it is a matter of “valuing taxpayers’ money more again”, according to the finance minister.
IHS boss Neusser said about the high food prices that this indicates “that we have to do something about the competition”. It is certainly necessary here to “go beyond the books”.
Brunner sees the Greens on the move when it comes to the rental price brake that other EU countries have introduced. Here, no agreement was possible with the coalition partner, “because measures for property formation would have been necessary,” Brunner reminds of the ÖVP’s wish to involve home builders more closely in the price-dampening measures.
Once again, Brunner explained that the increase in the benchmark rents would affect “only a small part” of the tenants, but one could talk to the Greens again about it. There is no need for the federal government to stop fees, as there are no increases anyway – states and municipalities are in demand here, said Brunner.
Economic researcher Neusser gave little hope of a rapidly falling inflation rate, because there is still high demand, for example in the catering trade, which keeps prices high. Basically, the economist said: “We have become poorer as an economy, we buy expensive and have to sell cheaper.”
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