Inflation – Rendi-Wagner for zero VAT on food

The calls for political reactions and appropriate measures against the current inflation in Austria are getting louder. SPÖ leader Pamela Rendi-Wagner is calling on the government to set VAT on food to zero in view of the skyrocketing prices. The EU has made this possible with a new directive, and the government should implement this proposal, she said on Sunday in the ORF “press hour”. Because “it cannot be that the state still profits from the inflation”.

Rendi-Wagner once again urged rapid action. It is important to “prevent a social crisis”, many people can no longer afford daily life. The relief package put together by the ÖVP and the Greens in the amount of 3.7 billion euros does not help from the SPÖ leader’s point of view, “the problem is that nothing gets through to the people”.

“Targeted measures” would be necessary to lower prices and relieve people from tax, Rendi-Wagner reiterated the SPÖ demands: Temporary reduction in mineral oil tax or value added tax on gas and electricity, energy price caps for low earners, early pension increase by five to six percent and tax reform with 1,000 euros annual savings for working people.

That would make a total of three to four billion euros in relief, but it would help more accurately, argued Rendi-Wagner. She would also welcome the currently discussed abolition of cold progression – albeit with an automatism only for lower and middle tax brackets.

Union for “More Speed”

ÖGB boss Wolfgang Katzian wants to counteract inflation not only in wage negotiations, but also by reducing VAT on food. The tax should be “halved or even suspended for half a year,” said Katzian in an interview with “oe24”. The ÖGB boss wants to put the thumbscrews on the electricity suppliers, who would currently benefit from the high gas price, with special taxes.

“The electricity prices are always based on the highest possible last tariff, because gas is expensive, they are very high. However, water has not become more expensive, which means that the association, for example, makes very high profits from electricity sales. This windfall profit should be skimmed off”, said Katzian. However, he did not say how high the tax should be. Discussions with the Treasury to combat inflation are ongoing but are dragging on “like a strudel”. More speed is needed, said the union boss. “The people in the country are really pissed off.”

FPÖ chairman Herbert Kickl and SPÖ federal manager Christian Deutsch also criticized the government’s inertia in terms of inflation on Sunday and referred in their respective broadcasts to a survey by the Institute for Demoscopy and Data Analysis (IFDD) on behalf of the “Kronen Zeitung”. According to this, more than half of the population is finding it difficult to cover their expenses for shopping, electricity, gas and fuel. A vast majority of 80 percent have already changed their consumption patterns because of inflation.

The FPÖ also calls for tax cuts

For Kickl, “reducing taxes on energy costs, fuel and staple foods is the order of the day”. Meanwhile, Deutsch argued that inflation “must be returned by the government” and called for a “money-back guarantee”.

The Ministry of Finance said, however, that the experts at the International Monetary Fund (IMF) “advise to rely on structural changes instead of temporary individual solutions to combat inflation. We are already doing this in Austria and we also have a relief package amounting to one percent of our GDP in Austria Implementation,” said Finance Minister Magnus Brunner (ÖVP) in a broadcast following the IMF and World Bank meetings of the past few days.

The World Bank experts would also recommend a return to a sustainable budget policy, provided that this is possible in the context of the crisis. This would give the European Central Bank (ECB) further room for maneuver in the fight against inflation. According to Brunner, this scope for action is currently limited. (apa, red)

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