Austria: Public Sector Inefficiencies Have Become Less Affordable

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 be...

Full description

Saved in:
Bibliographic Details
Published in:OECD Economic Department Working Papers 2011-10 (897), p.0_1
Main Authors: Fischer, Karin, Gönenç, Rauf, Price, Robert
Format: Article
Language:English
Subjects:
Budget deficits
Cost control
Debt restructuring
Deficit financing
Economic development
Expenditures
Fiscal policy
GDP
Government spending
Gross Domestic Product
Interest rates
Macroeconomics
Public sector
Reforms
Studies
Taxation
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary: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. [PUBLICATION ABSTRACT]
ISSN:1815-1973