Corona aid – Momentum sees Corona over-funding

The union-related Momentum Institute has looked at the EU subsidy transparency database and the annual financial statements of Austrian companies and has come to the conclusion that Austria’s gastronomy and hotel industry in particular have received far too much corona aid. Many companies could even have increased their profits as a result, say the momentum economists and recommend a special tax (“overfunding tax”) to skim off these profits again.

“We took a closer look at 502 companies and it turns out that over 367 companies have written profits,” said momentum economist Oliver Picek in the ORF “Morgenjournal”. The annual financial statements for 2020 were evaluated. “That strongly indicates over-funding,” said Picek. Momentum has calculated that the total over-funding of the companies under review amounts to 103 million euros. “A share of sales was always replaced without paying attention to the actual costs,” criticized momentum economist Alexander Huber, according to the press release.

For the Chamber of Commerce, the momentum figures are neither comprehensible nor representative. “Momentum lists 367 companies that would have made profits. Relation: According to the figures available to us, at least 150,000 domestic companies have received economic aid,” it says from the WKÖ. “Due to the high level of impact on tourism, we estimate that around 38,000 applicants for funding will come from the tourism industry.” The rapid economic aid was not only necessary to secure the liquidity and existence of the companies, but also thousands of jobs.

Not all of the funded companies affected by the crisis

New figures on corona aid were imported into the EU Commission’s database at the end of December 2021. According to “Standard” (Thursday edition), it shows that sectors that were not in a crisis were also promoted – such as a supermarket, a drugstore chain and electronics retailers. Those companies that conduct their economic activities across several companies have also received particularly high grants.

Momentum only examined companies that received higher subsidies because state aid does not have to be published until 100,000 euros or more. The subsidized short-time work is also not included in the calculations. The Momentum Institute recommends the introduction of a special tax (“excessive subsidy tax”) in order to return excessive subsidies to the state budget. “Using taxpayers’ money to subsidize rising profits clearly misses the point.”

The momentum demand for a special fee also joined the deputy. SPÖ club chairman Jörg Leichtfried. “While many small and medium-sized businesses are still waiting for support, some big ones have made the business of their life with help from tax money – even those with good contacts to the ÖVP,” says Leichtfried. The government must change the corona aid immediately. “It would never have come this far if the government had not overturned the epidemic law,” Leichtfried said, according to the announcement. “One could have created a simple, clear model in which all companies receive a generous payment on account, but are settled on their income tax returns at the end of the year.”

More information needed

The Wifo economist Werner Hölzl emphasized to the “Kurier” (Thursday edition) that you need information on all companies for precise model calculations, but that data for small and medium-sized companies are subject to data protection and are therefore not recorded in the transparency database. “We hope that in the future science will have better access to data to clarify such questions,” said Hölzl. “Then certain debates may become less intense because they are on a rational basis.” Previous analyzes of subsidies would suggest that “in most cases there was no over-subsidization,” said Hölzl.

For the KPMG tax advisor Verena Trenkwalder, president of the tax advisor in Upper Austria, there is “no question that some were over-funded and some under-funded”. The sales replacement in November 2020, which replaced 80 percent of the lost sales, “really went a little wrong,” said Trenkwalder to ORF radio. “That was definitely too high.”

The economically liberal think tank Agenda Austria assesses the corona aid as fundamentally correct. The fact that subsidized companies make high profits shows, however, that the government has not managed to set up its aid measures correctly. In contrast, in Germany, for example, the short-time work payments were offset against the turnover replacement. “A legally correct reclamation of the corona aid that has been rightly received will be difficult to implement,” said Agenda economist Marcell Göttert of the “Standard”. (apa)

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