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Austria: Public Sector Inefficiencies Have Become Less Affordable

  • Karin Fischer
  • Rauf Gönenç
  • Robert W.R. Price
Registered author(s):

    Performance of fiscal policy, while good in international comparison, is not sufficient to prepare for future ageing-related spending increases. Subject to macroeconomic developments, the pace of consolidation could be more ambitious than currently planned, with a view to reducing the debt burden below 60% of GDP by 2020. Austrian fiscal policies have tended to be pro-cyclical in upturns, mainly because spending was not adequately kept in check. Stronger fiscal rules and a reform of inter-governmental fiscal relations could help contain expenditure dynamics. Efficiency-raising reforms in key spending areas such as pensions and other social expenditures, health, and education are also highly needed to reduce spending and ensure the provision of high-quality public services at lower cost. In this regard, Austria should make full use of the performance budgeting framework it plans to introduce from 2013. Higher potential growth could also take off some of the pressure on public finances. There remains significant room to rebalance the tax structure towards less distortive sources of revenue, thus supporting employment and growth. Autriche : Les carences du secteur public sont de moins en moins supportables Les résultats de la politique budgétaire menée par les autorités autrichiennes sont bons par rapport à d’autres pays, mais insuffisants pour faire face aux augmentations des dépenses qui seront induites par le vieillissement de la population dans les années à venir. En tenant compte des développements macroéconomiques, le rythme d’assainissement pourrait être plus rapide que ce n’est actuellement le cas, de façon à ramener la dette au-dessous de 60 % du PIB d’ici 2020. Traditionnellement, la politique budgétaire en Autriche a toujours été procyclique au cours des phases ascendantes en raison d’une maîtrise insuffisante des dépenses. Le renforcement des règles budgétaires et la réforme des relations budgétaires entre administrations pourraient contribuer à endiguer la hausse des dépenses. De même, des réformes visant à accroître l’efficience des principales catégories de dépenses, comme les retraites et autres dépenses sociales, la santé et l’éducation sont indispensables pour freiner les dépenses et garantir des services publics de qualité à moindre coût. À cet égard, l’Autriche devrait recourir systématiquement au cadre de budgétisation dans l’optique des résultats qu’elle envisage de déployer en 2013. L’accélération de la croissance potentielle pourrait également soulager les tensions qui s’exercent sur les finances publiques. Il reste encore beaucoup à faire pour rééquilibrer la structure de la fiscalité au profit des sources de recettes provoquant le moins de distorsions, afin de soutenir l’emploi et la croissance.

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    File URL: http://dx.doi.org/10.1787/5kg3nzkxsv7c-en
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    Paper provided by OECD Publishing in its series OECD Economics Department Working Papers with number 897.

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    Date of creation: 17 Oct 2011
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    Handle: RePEc:oec:ecoaaa:897-en
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    1. Joumard, Isabelle & Price, Robert & Gonand, Frédéric, 2007. "Public Spending Efficiency: Institutional Indicators in Primary and Secondary Education," Economics Papers from University Paris Dauphine 123456789/11017, Paris Dauphine University.
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    7. Michael Böheim & Heinz Handler & Margit Schratzenstaller, 2010. "Options for Revenue-based Fiscal Consolidation," WIFO Monatsberichte (monthly reports), WIFO, vol. 83(3), pages 269-283, March.
    8. Karl Aiginger & Hans Pitlik & Margit Schratzenstaller, 2010. "Options for the Consolidation of Public Budgets in Austria," Austrian Economic Quarterly, WIFO, vol. 15(2), pages 184-197, July.
    9. Teresa Curristine & Zsuzsanna Lonti & Isabelle Joumard, 2007. "Improving Public Sector Efficiency: Challenges and Opportunities," OECD Journal on Budgeting, OECD Publishing, vol. 7(1), pages 1-41.
    10. Andrés Fuentes & Eckhard Wurzel & Andreas Wörgötter, 2006. "Reforming Federal Fiscal Relations in Austria," OECD Economics Department Working Papers 474, OECD Publishing.
    11. Gerhard Steger, 2010. "Austria's budget reform: How to create consensus for a decisive change of fiscal rules," OECD Journal on Budgeting, OECD Publishing, vol. 10(1), pages 1-14.
    12. Romain Bouis & Romain Duval, 2011. "Raising Potential Growth After the Crisis: A Quantitative Assessment of the Potential Gains from Various Structural Reforms in the OECD Area and Beyond," OECD Economics Department Working Papers 835, OECD Publishing.
    13. Åsa Johansson & Chistopher Heady & Jens Arnold & Bert Brys & Laura Vartia, 2008. "Taxation and Economic Growth," OECD Economics Department Working Papers 620, OECD Publishing.
    14. Hans Pitlik & Kristina Budimir & Norbert Gruber, 2010. "Options for Budget Consolidation on the Expenditure Side," Austrian Economic Quarterly, WIFO, vol. 15(2), pages 211-230, July.
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