Steinbrück attacks Austrian government over budget delay
Former German Social Democratic (SPD) Finance Minister Peer Steinbrück has criticised the Austrian Social Democrats (SPÖ) for holding back information on the 2011 budget after two provincial elections took place.The Austrian SPÖ government and the conservative Peoples Party (ÖVP) controversially announced it would wait until December to reveal possible higher or new taxes and cuts. The coalition claimed this procedure would ensure it could react to the changing predictions of think tanks and the development of the Austrian economy.Opposition parties claimed the SPÖ and ÖVP are only trying to avoid losing popularity for the provincial elections in Styria (26 September) and Vienna (10 October). Freedom Party (FPÖ), the Greens and the Alliance for the Future of Austria (BZÖ) accused the coalition of deliberately breaching the constitution which says every government must present next years budget 10 weeks ahead of New Years Day.Steinbrück told weekly Austrian magazine News: “You fare better in elections if you clearly tell people what they can expect. That is what they want politicians to do. Covering up will not be rewarded.”The MP warned people would lose trust if they regard politicians actions as insincere tactical manoeuvres. He also pointed out the people would endure bad news if they had the feeling the financial burdens were “justly shared”.Steinbrück caused serious tensions between Austria and neighbour Germany last year when he mentioned countries on the International Tax Justice Network (TJN)s “grey list” of so-called tax havens in the same sentence with Ouagadougou, the capital of Burkina Faso.Speaking ahead of a meeting of European Union (EU) finance ministers in the German capital Berlin in May 2009 he said: “We will of course invite all countries to the conference in Berlin in June – Luxembourg, Liechtenstein, Switzerland, Austria, Ouagadougou.”He later on apologised for the remark and revealed he had initially planned to compare the affected states with “Taka-Tuka Land”, an island which beloved childrens books and films character Pippi Longstocking heads for in one of her adventures.Steinbrück explained later on: “I considered Taka-Tuka Land as an alternative for just one second. But then readers of Astrid Lindgrens books would have complained.”Austrian ÖVP Finance Minister Josef Pröll was outraged by Steinbrücks sarcastic comment which was widely seen as a diplomatic insult comparing Austria, one of the worlds richest countries, to a third-world nation with a high infant mortality rate, soaring crime and political instability.Asked how Austria could slash its budget deficit, Steinbrück made clear he supported the idea of raising the maximum tax rate. The Social Democrat who new book “Unterm Strich” was released last month also said he would introduce a tax on assets and a levy on turnover in financial transactions.Steinbrück further told News he would advise the Austrian government to check how effective its family subsidy payments were.Austrian opposition leaders are convinced in their belief that the coalition kept quiet about the 2011 budget only because of the ballots. As Pröll announced on Monday one day after the Vienna city parliament election he planned to present a three-year budget plan shortly.The finance minister explained he wanted to come to an agreement with the SPÖ on tax rates and spending cuts this month in order to present details sooner than initially planned.Pröll said the coalition will not only present its budget plans for next year, but also for the years 2012 and 2013 when the next general elections are due. The minister also revealed the government will spend more on the education system if the growing economy could bring higher tax revenues.FPÖ economic affairs spokesman Bernhard Themessl said, referring to the governments initial reluctance to present the 2011 budget on time: “Pröll turns into a fortune teller and a budget guru just one day after the lost Vienna election.”Greens MP Werner Kogler said Prölls plan to agree and present the budgets for three years in just a few weeks was “absurd”. He said: “Pröll should rather explain why the government was unable to agree on the 2011 budget within the past 10 months.”SPÖ and ÖVP made it clear earlier this year that they wanted to introduce a so-called bank solidarity tax. This levy should help it to an extra 500 million Euros in revenue per year. The coalition argued bank institutes should do their part in restoring the state budget after being bolstered with billions of Euros by the state throughout the credit crisis.The SPÖ has campaigned in favour of a tax on assets and a levy on financial transactions, while the ÖVP said it wanted to create a new eco-tax scheme to increase subsidies for renewable energy technologies. Pröll kept tight-lipped about what this levy meant in detail, while motorists associations appealed to the SPÖ-ÖVP coalition not to increase taxes on car fuel.Alleged plans to avoid losses in the Styrian and Viennese elections by delaying the presentation of the budget has turned into a massive flop for both coalition partners.The ÖVP reached 37.2 per cent in Styria, down by 1.5 per cent compared to the 2005 vote. The Styrian SPÖ remained the strongest faction in the provincial parliament, but suffered losses of 3.3 per cent. It garnered 38.3 per cent.The SPÖ is forced to approach the ÖVP and Greens for coalition talks after losing its majority in Vienna last Sunday. It bagged 44.6 per cent, down from 49.1 per cent five years ago. The ÖVP lost 4.9 per cent giving the party it’s worst ever result with just 13.8 per cent.The FPÖ improved by 6.1 per cent in Styria to 10.7 per cent. This result guarantees the right-wing one seat in the nine-member government. The FPÖs Viennese department celebrated its second-best performance in the city last Sunday when it claimed 26.2 per cent.