3. Austria’s strategy
The current government, which is in office since the year 2000, broadly followed this categorisation,
when formulating its strategy. The following are the most important recent policy measures.
Reform of past-related expenditures:
Pension reform:
The pension reform of 2003 has already put the Austrian pension system in a much better position of
financial sustainability. Legal (early) retirement ages will increase continuously, early retirement will
gradually be phasing-out, a markedly stronger match between contributions and benefits will be
introduced, and strong financial incentives to work longer have been implanted into the systems. By
January 1st 2005 the newly established harmonized pension accounts will become effective.
In addition to these measures, the government emphasized the second and third pillars of the pension
system. Financial incentives have been set up to strengthen these pillars, which have not played are role
in the old system. This will also strengthen the Austrian capital market and lead to a better risk
diversification.
Table 2
Base
year Long Run Projections2005 2015 2020 2025 2030 2035 2040 2045 20502005-
2050
% change
per à
Before 2003 reform
Pension spending in bn € 24,9 33,4 38,2 44,1 50 56 60,3 63,5 66,7 2,2
Pension spending as a % of GDP 10,2 10,8 11,3 12,1 12,7 13,2 13,1 12,8 12,5
Federal contribution as a % of GDP 2,6 3,2 3,7 4,5 5,1 5,6 5,6 5,2 4,9Harmonization 2004
Pension spending in bn € 24,8 33,1 37,7 42,5 46,8 50,9 53,9 56,2 58,5 1,9
Pension spending as a % of GDP 10,1 10,6 11,1 11,6 11,8 12 11,7 11,3 10,9
Federal contribution as a % of GDP 2,2 2,7 3,1 3,7 3,9 4 3,8 3,3 3
Calculations exclude civil servant schemes.
Reform of system-keeping expenditures:
Public sector administration reform:
In order to enhance effectiveness and efficiency in public administration a comprehensive reform agenda
has been introduced. The traditional public administration has been reorganised towards new public
management, comprising, inter alia, a re-launch of the controlling and reporting systems. Parallel to the
modernisation of the central government a steady reduction of staff has taken place. The overriding
objective is to provide a better output with fewer, but more qualified personnel. Between 2003 and 2006
staff in the central government is going to drop by 10.000.
The reform measures include:
"Elektronischer Akt" (ELAK): By introducing the electronic file, it will be possible to have an electronic
communication within and between Ministries.
- "FINANZonline" in the Ministry of Finance: It enables unlimited and reciprocal electronic
communication between the tax administrations, citizens, and economic agents; - Establishment of the "Buchhaltungsagentur": the previous 32 ministerial accounting offices have
been centralised under a central government accounting agency. - Project "Serviceleistungen im Bund" is aimed at centralising and optimising support tasks.