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• Since 2000, the public sector administrative reform has contributed to the fiscal consolidation
  process by producing savings of around €1.1bn. €. Between 2003 and 2006, annual savings are
  planned to increase to € 1.3 bn.


• This reorientation has given scope to three budgetary supply-side oriented stimulus packages
  resulting in an additional real GDP growth of 0.5 % - 0.75 % (Source: WIFO).


• Furthermore, the government passed a major tax reform with estimated growth effects of 0.4 % in
  2005 and 0.5 % in 2006 (Source: WIFO).


• The stimulus packages, the growth and competitiveness package and the tax reform will add up to
  tax revenue losses of € 3 415m (1.4 % of GDP) in 2005 and € 3 684m (1.5 % of GDP) in 2006.

Finally, it should be clear that public expenditures are only inputs to achieve economic policy goals.
Thus, a mechanical interpretation of spending shares according to the three time dimensions cannot
replace the proper assessment of public intervention. However, shifts in the shares shed light on potential
problems, and in combination with long-run projections the need for reviewing existing policies may
become more evident than by other methods.

Annex:

Table 3 - Total General government expenditure, mill. EUR

COFOG (010-100)

Government (S.13), consolidated

COFOG Total General government expenditure (mill.EUR)

1995 1996 1997 1998 1999 2000 2001 2002

010 General public services 16.091 17.195 15.244 17.075 16.763 17.598 18.094 16.826

020 Defence 1.764 1.784 1.821 1.833 1.880 1.958 1.912 1.911

030 Public order and safety 2. 653 2.708 2.791 2.888 2.996 2.990 2.992 3.094

040 Economic affairs 8.783 8.510 8.500 9.227 9.540 8.437 11.029 11.273

050 Environment protection 2.383 2.421 699 652 862 842 821 734

060 Housing and community amenities 2.026 2.127 2.022 2.147 1.877 1.827 2.220 1.786

070 Health 13.025 13.302 14.527 15.160 15.480 15.833 12.857 14.559

080 Recreation, culture and religion 1.912 1.958 1.977 2.025 2.292 2.136 2.272 2.297

090 Education 11.114 11.089 11. 154 11.422 11.778 12.011 12.097 12.543

100 Social protection 38.924 39. 996 39.984 40.948 43.328 44.670 45.690 47.070

010-

100

Total 98.676 101.090 98.718 103.377 106.797 108.302 109.984 112.093

Source: Statistic Austria, 2004