Plan A for Austria
In January 2017 Christian Kern, federal chancellor and chairman of SPÖ, launched the Plan A for Austria, a 145-page document outlining his vision for economic and social reform. The plan’s primary focus lies with strategies to stimulate growth by strengthening investment and labour demand on a national level. The aim is to implement practical measures that improve the lives of people in Austria and to change the economy in a way that allows more people to participate in the country’s growing prosperity.
Four key points on social and economic policy in a nutshell:
One of these practical measures is a minimum wage of 1,500 Euro for everyone working full-time. There are still some 7 per cent in the Austrian labor force who work for less. This is hardly enough to make a living. Women are especially affected by these low wages. Raising the minimum wage to a sensible level can stimulate demand without reducing employment, as the experience of Germany or the UK has shown.
To earn higher wages workers must achieve higher productivity. Therefore Plan A sets out ways to improve education. In Austria, as in other European countries, children’s education is strongly determined by the educational achievements of their parents. This is not only unfair, it is also inefficient. It is crucial to break family privileges and increase upward mobility in educational attainment. To do this, Plan A proposes to
- spend more on early childhood education
- focus resources in problematic school districts where they are needed most
- reduce the administrative burden for teachers, so they can focus on teaching
- strengthen education in “digital competences” to prepare children for the future and increase the number of graduates in STEM disciplines
Reduction of non-wage labour costs
Plan A also contains policies to reduce the tax burden of labour. A reduction of non-wage labour costs is designed to increase labour demand and, at the same time, compensate the shortfall in public revenues with an increase in taxes on non-renewable energy and ending tax loopholes for multinational corporations, especially on a European level.
Flexible working time
When it comes to the quality of Austria as a business location, employers are regularly asking for more flexible working hours, so they can adjust their production better to the fluctuations of demand. Here, there has to be a give-and-take: workers should have the right to choose a work-life-balance that corresponds to their personal situation more easily (eg switching from full to part time employment and vice versa); in response it could be imaginable to extend the maximum number of legally allowed working hours within reason.
There are many more issues Plan A touches upon, ranging from increasing support for startups, R&D and digital infrastructure, to combating unfair wage dumping within the EU; from mandatory quota of 40 per cent women on all company boards, to a job guarantee for older unemployed people. To sum it up: Plan A is a pro-growth programme to stimulate the Austrian economy, but it is targeted towards inclusive growth and sustainable growth. It defines sustainability not only ecologically and financially, but also socially in order to overcome the growing fragmentation society is facing right now: a fragmentation that comes at high costs and will eventually lead to political disruptions by populist or extremist parties.
Christian Kern managed to include some key points of Plan A in the new coalition agreement, presented in January 2017. Due to the fact that the new conservative leader Sebastian Kurz has recently decided to end the coalition government, Austria will have snap elections on 15 October 2017. Nevertheless, the social democrats will do their best to implement as many of the projects as possible.
Image credit: SPÖ / Shutterstock.com
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