“Throwing money out the window”: Fiscal Council boss criticizes the watering can principle

The government should distribute less money according to the watering can principle and at the same time finally tackle structural reforms in order to slow down the spending dynamics.

Basically, the government has gone the right way with inflation by not trying too hard to directly manipulate the inflation rate. According to Badelt, measures such as a reduction in VAT or price limits for petrol would only have pushed the problem of inflation backwards. It is therefore right to cushion the consequences of inflation for those people who are really in economic difficulties as a result. “The only problem is that we have promoted too much with the watering can,” which in turn increases inflation, emphasized the top debt guardian.

In principle, a loss of prosperity due to the various crises cannot be prevented. “You can only make sure that those who can carry them carry them and those who cannot carry them are supported.” However, recently too many subsidies have gone to people who could have endured a little loss of prosperity. “In the short term we would have saved a lot if we hadn’t thrown some of the money out the window. And that simply mustn’t happen again.”

Minimum income as a “construction site”

For those people who are still not receiving enough help to cope with the consequences of inflation, Badelt believes that support services that can be applied for individually, such as subsidies for heating costs or housing costs, should be improved. Another “construction site” is also the minimum income in most federal states. Here it must be ensured that this only goes to people who are unable to work, but at a level that one can really live on.

In the medium term, the structures would have to be addressed in order to restructure the budget, Badelt pleaded for reforms in the health system or a concept for all of Austria for subsidies in order to prevent double funding. “These are points that have been known for a long time and must finally be addressed.” The government must ensure that the state finances are put in order to some extent. He hopes that the finance minister will “put a little more on the table” here again.

Reluctant in debate about working time reduction

For Badelt, the current economic situation also has a “but potentially dangerous socio-political side”: In the populist movements, regardless of which party, it is common to act as if the government only had to press a button and everything would be fine. This issue will probably become even more acute as the budget becomes tighter. In addition, many tasks such as pensions, health and care are related to demographic development “and we have to make sure that there is a fair balance between the opportunities for younger and older people”.

In the debate about a reduction in working hours with full wage compensation, as is currently being demanded by the Chamber of Labor and the SPÖ, Badelt was cautious. He said he “didn’t get much” out of it, because “general scrutiny” about the statutory working hours was not wise, because all sectors would be treated the same even though they were very unequal. A reduction in working hours has been taking place for several years anyway, albeit at the level of collective and individual agreements.