Also, health care reform will be designed to lower spending for the present.
Additional savings will be achieved by a redistribution of tasks provided by federal state, Länder
and local authorities ("Finanzausgleich").Enhancing of spending for the future:
The stimulus and growth packages 2002/03 have strengthened the Austrian economy, implementing
measures in the field of R&D, education and infrastructure:
Research & Development:
Substantial additional funds will be directed towards research and development.
- Establishment of a national foundation for research, technology and development with expected
yields of € 125m per annum - Use of public funds for R&D in the public and private sectors at a 1:2 ratio
- Rule 25/8: research allowance of 25 % or alternatively a research premium of 8 % for expenditures
according to the "Frascati-Manual", research allowance of 35 % for R&D expenditures of value to
the economy.
Education:
When consolidating the budget (2000-2003), spending for education was not cut in nominal terms, but
emphasis was put on getting more value for money. In order to enhance the effectiveness and the
efficiency in education (universities, public schools), the government undertook a large reorganisation of
the system, with universities obtaining full autonomy on January 1st, 2004. Within the scope of the
Growth Package 2003, universities, universities of applied sciences and schools got app. € 100m for
further improvements in equipment and for educational projects on innovation. Furthermore, an
education tax allowance of 20 % was introduced.
Infrastructure:
Investments in the transport system will be increased over the coming years (within the framework of the
Austrian and TEN strategies for 2010). The network of motorways will be enlarged in general, existing
gaps be closed, supplements to the net are to be established, and capacities within the country are to be
adjusted. The railroad net will be further extended, and measures have been enacted to reinforce greater
efficiency in the system, to provide a better customer service and to increase in individual travel and
freight transportation.
4. Assessment and conclusion
The Austrian approach aims at detecting dynamic problems in public finances by analysing the time-
structure of public expenditures and its impact on GDP and employment growth.
Austria has undertaken measures that "dampen" the pressure on "past-related" spending, such as through
the pension reform in view of the ageing of the population and the aim to achieve a balanced budget
balance over the cycle. The strategy aims at containing expenditures for the past and maintaining the
present system. This will help in prioritising expenditures for future investment, without worsening the
fiscal balance:
- The long run effects of the Pension Reform 2003 (excl. harmonisation) were estimated to amount
to app. 1 % of GDP. Savings in the civil sector pension schemes could add some 0.1 pp until 2010
and up to 0.3-0.4 pp until 2030.