Savings Package Affects Low-Income Earners More

According to the parliamentary budget service, the government's austerity package affects lower incomes significantly more than higher ones, for example through the abolition of the climate bonus. The Greens see this as evidence of an "unsocial" austerity package, while Finance Minister Markus Marterbauer (SPÖ) tried to explain the package on Bluesky.

Budget Service Sees Low Earners More Affected by Austerity Package

According to the analysis, the lowest decile, i.e., the ten percent with the lowest incomes, bears eight percent of the net consolidation volume, while the top decile bears 14 percent. The abolition of the climate bonus is distributed relatively evenly across the different strata. When the third third of the cold progression is suspended, the share increases with income, as does the increase in health insurance contributions for pensioners. The suspension of the valorization of social benefits, on the other hand, is disproportionately borne by the bottom two deciles. In the case of the increase in the commuter euro and the tax-free employee bonus, larger portions fall on the upper income half.

However, if the absolute burden of net consolidation is related to income level, households with lower incomes are more affected. For example, the abolition of the climate bonus leads to a higher relative income reduction for households with low incomes. Inequality researcher Emanuel List from the WU Vienna also emphasized to the Ö1 lunchtime journal that lower incomes contribute relatively more significantly, as the climate bonus, for example, carries more weight. This also has an impact on economic growth: "In general, it is known that lower income groups can save less, so they consume more, and every euro that is missing here naturally contributes more to the economy being less stimulated."

In 2025, the federal government's measures will reduce the average household income by 0.8 percent, but the reduction ranges from 0.4 in the top to 2.3 percent in the bottom decile, according to the budget service. This effect will increase by 2029, reducing the average income by 1.6 percent. The impact in relation to income ranges in 2029 from a reduction of 1.1 percent in the top decile to a reduction of 3.3% in the bottom decile.

Greens Criticize "Unsocial" Austerity Package

The Greens feel validated in their criticism of the federal government by the analysis of the austerity package. Alma Zadic, deputy club chairwoman of the Greens, stated in a press release: "The government is cutting where it hurts the most - with families, with children, with single parents. A mother working at the supermarket checkout, worried about whether she can still afford her child's next school trip, now has even less in her wallet. Meanwhile, top earners remain completely untouched."

Finance Minister Marterbauer on Austerity Package: "We Are Making an Effort"

The responsible Finance Minister Markus Marterbauer (SPÖ) responded on Bluesky to the criticism: "The elimination of the climate bonus, the non-increase of child benefits, and other measures have negative distribution effects because the same absolute savings amount has a greater impact in relation to income at the lower end." In return, however, they are setting accents on taxes. Many offensive measures with positive distribution effects cannot be attributed to individuals and are not considered, but primarily help "at the bottom."

This also applies to improvements in many social services for families, such as the second mandatory kindergarten year or the expansion of psychosocial care for children and adolescents. "We are proud of the measures in favor of particularly poverty-stricken groups. But we also know that much more is needed." Soon, they will begin with the "Task Force Subsidies" and the development of measures against tax evasion. "I expect very positive distribution effects from this. We are making an effort," said Marterbauer.

(APA/Red)

This article has been automatically translated, read the original article here.