Blümel/Schwarz: New Productivity Council to be established in Austria
The aim of the new committee is undertake analyses and make recommendations on improving productivity

Through the setting up of a national Productivity Council, for the first time Austria will now have a committee of experts dedicated to issues related to improving productivity and enhancing the quality of life. The Federal Ministry of Finance will today be submitting the corresponding draft law for evaluation. According to Finance Minister Gernot Blümel, "Following the economic downturn caused by the pandemic, our aim is to enable a swift and sustained recovery. At the same time, over the long term, we need to increase productivity in Austria in order to secure jobs and prosperity. Over the past twenty years, growth in productivity in Austria has consistently been lower than in comparable countries such as the Netherlands, Switzerland or Sweden. Higher productivity will help not only Austria as a centre of economic activity, but will also secure the long-term financing of our welfare state."

Jakob Schwarz, the Austrian Green Party's spokesman on budget and tax affairs, considers it particularly important for productivity to not just be measured in euros. "Until now, productivity, which is a key indicator of a society's prosperity, has always been measured in terms of GDP. Through the new Productivity Council, this indicator will be more broadly interpreted, and also extended to the environment, health, education and other important factors." The Fiscal Advisory Council too, a committee which prepares budget analyses and conducts audits of compliance with fiscal rules, will also be given a broader remit.

With the aim of achieving administrative efficiency and in order to utilise synergy effects, the Productivity Council will be set up within the Fiscal Advisory Council at the Austrian National Bank, and will consist of five members. The Council chair, as well as two additional members, will be appointed from the federal government, with one further member respectively from the Economic Chamber and the Chamber of Labour. The Council members will hold office for a period of six years. Economist Christoph Badelt, President of the Fiscal Advisory Council, will also be President of the Productivity Council.

The draft law requires the Council to produce analyses of productivity and competitiveness, as well as identify potential improvement measures. Through this, the aim is to strengthen Austria as a centre of economic activity and enhance long-term growth and convergence. In the process, productivity will be considered from a broader perspective, incorporating the evaluation of additional factors linked to the legal system, education and demography, as well as the environment and quality of life. The Productivity Council will prepare an annual report comprising specific recommendations. The aim of the new committee is to approach productivity not only in terms of statistics on Austrian economic efficiency, but also to incorporate aspects of ecological transformation and social responsibility into its discussions and analyses.

According to an EU Council Recommendation of 2016, eurozone Member States are required to set up productivity councils or committees. They should be interconnected through networks and analyse developments in terms of competitiveness and productivity. The background to the initiative lies in the fact that these features are of particular economic-policy relevance for developed national economies within a monetary union. Moreover, during the financial and economic crisis, macroeconomic imbalances between the EU Member States came into sharper focus due to their exacerbating impacts. Institutional bodies such as productivity councils and committees have the capacity to assist with monitoring in this context. They also serve to improve productivity and competitiveness within the EU, thereby enhancing the ability to absorb shocks. As a result, setting up productivity councils or committees additionally promotes the stability of both the eurozone and the financial markets.