Government consultation: €50 billion for rescue, relief and investments
Finance Minister Blümel: fixed costs subsidy will be extended and income tax reform brought forward. Total package of €50 billion to put Austria back on track.
“Coronavirus has thrown many countries off track. This package is intended to get Austria back on the right path”, Finance Minister Gernot Blümel said at today's press conference on the government’s consultation. Three packages were presented during the consultation: rescue, relief and investments. The Austrian Federal government’s total package amounts to €50 billion.
The rescue package, among other things, extends the fixed costs subsidy and brings forward income tax reform, which was also negotiated as part of the government programme, to support the relief measures. The lowest level of income tax will be reduced from 25% to 20%. “Bringing forward income tax reform, which we also negotiated as part of the government programme, is an important part of the relief package, so that people have more money in their pockets. In our view, lowering taxes is always the right approach. In a situation like this, where it’s also about stimulating demand, it is especially relevant”, Finance Minister Blümel continued. In addition to other relief measures, there will also be a loss carryback, with business losses being offset against profits in 2019 and 2018, so that some of the deferred taxes may not have to be paid back at all.
A third area is the investment package. This package includes an investment premium designed to encourage businesses to purchase capital goods this year. It will come into effect at the beginning of September and will run into next year, so that investments can be brought forward at this time. There will also be a declining balance depreciation option for an unlimited period. Up to 30% of capital assets will be depreciable in the first year. “This is a massive incentive to purchase capital goods, put money into circulation and boost the economy”, said Blümel.
In addition, the federal government will take measures to increase the equity ratio of Austrian companies. “In the crisis, Austria’s external financing structure is taking a double toll on some enterprises. That’s why we aim to agree on several measures to increase equity ratios”, Finance Minister Blümel continued.