SPÖ Leader Babler Advocates for Reduction of Value-Added Tax on Food

According to the SPÖ, SPÖ leader and Vice Chancellor Andreas Babler and Finance Minister Markus Marterbauer agreed to "consider" the reduction of VAT on food - however, under the following conditions: "Counter-financing must be ensured, the measures must reduce inflation, and the reduction must also be passed on to consumers."

Economists Have Different Views on Reducing VAT on Food

The measure is "not so targeted" from a social policy perspective, said IHS head Holger Bonin in response to journalists' inquiries on Tuesday during the economic forecast. It is more important to create more competition in the food trade. The coalition counterpart of Marterbauer in the Ministry of Finance, State Secretary for Finance Barbara Eibinger-Miedl (ÖVP), also recently referred to the state budget. "I mentioned the reduction of VAT on food in the summer as a possible option, but at the same time pointed out the challenging budgetary situation."

Reduction of VAT on Food: State Secretary Wants to Be Cautious

Today she said: "After the recent statements of the Vice Chancellor, I assume that my proposal from the summer will now be thoroughly examined by the SPÖ. It is important to me that we, as the federal government, implement measures against inflation that have a sustainable impact. We must pay close attention to how these affect the budget and the economy." Alexander Pröll, State Secretary and government coordinator on the ÖVP side, was reserved about the Vice Chancellor's wishes following Wifo Director Felbermayr's push for a VAT reduction on food and an increase in property tax. "I rule out an increase in property tax," he stated on the sidelines of a press conference. Regarding Babler's further demands, he said it is "not part of our considerations." They will not shy away from discussions, "but in principle, we do not see it that way."

Opposition Criticizes Debate on Reducing VAT on Food

For the opposition, the numerous statements are proof of "chaos days." FPÖ social spokesperson Dagmar Belakowitsch described the statements from the government side as "a farce at the expense of the population." The Greens criticize in a statement: "The ongoing back and forth within the SPÖ over ever-new populist announcements unfortunately does not make a single pack of butter or a kilo of pasta cheaper." Farmers, on the other hand, reacted unsettled. "The price debate around food has long been out of balance. Anyone who thinks that we should now focus on what we eat every day has not understood the problem," said Farmers' Association President Georg Strasser. Hotel operators are also alarmed. They, in turn, advocate for a VAT reduction. In Germany, at 7 percent, and in Switzerland, at 3.8 percent, the VAT on hotel stays is clearly below that in Austria. The two Vienna economic research institutes Wifo and IHS forecast an inflation rate of 3.5 percent for this year. The EU's target is a value of two percent.

(APA/Red)

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