WKO boss wants price freeze

Federal Economy Chamber (WKO) President Christoph Leitl has called on the state and Austria’s nine provinces to abstain from raising fees in 2012.

Leitl told the Kurier today (Weds) cities and communities should not introduce higher prices for services such as water disposal and the provision of gas. The WKO chief argued yesterday’s metal industry salary negotiations agreement proved that businesspeople cared about people’s spending power. Leitl concluded that public authorities should now do their bit in keeping consumption levels up to stabilise the domestic economy as experts warn of a weaker than expected increase of the gross domestic product (GDP).

Industry chiefs and unionists agreed that the country’s 165,000 metal workers would earn 4.2 per cent more from next month. Low wages will rise stronger while those who have earned comparably high sums so far will get 3.8 per cent more as of 1 November. The agreement costs the industry 300 million Euros, according to reports. Labour union leaders said before an agreement was reached that significant raises would also positively affect people’s purchasing power and therefore boost the domestic retail trade and other sectors in volatile economic times. However, Thomas Leoni of the Viennese Institute for Economic Research (WIFO) said that higher earnings would not automatically increase people’s buying mood. He said various aspects were of importance.

Leitl’s call on public institutions like town halls and provincial authorities to abstain from increasing service fees next year comes on the heels of price hikes by energy sector firms. Three leading gas providers said in August they would jack up their consumer prices between 3.2 and 5.5 per cent this month. Vienna’s Wien Energie, Lower Austrian company EVN AG and Eisenstadt-based BEGAS were attacked by consumer rights watchdogs and other organisations for their decision. OÖ Ferngas – which is based in Linz – plans price hikes as well, according to the Upper Austrian department of the Austrian Labour Chamber (AK).

Wolfgang Anzengruber – who heads Austria’s biggest electricity provider Verbund AG – said in July his company would not implement price hikes in the remainder of 2011. He added that increases were possible in the long run.

Gas cost 10.5 per cent more last August than in the same month in 2010, according to the Austrian Energy Agency. The organisation also found that heating oil cost 18.3 per cent more. Prices households had to pay for electricity in August of the current year resembled sums forked out in the same month of last year, according to a statement by the agency.

Vienna City Hall informed residents that the supply with tap water would cost 33 per cent more from 2012. The city government of Social Democrats (SPÖ) and the Green Party stressed that this was the first price hike since 1995. The opposition in the form of the conservative People’s Party (ÖVP) and the right-wing Freedom Party (FPÖ) reacted with outrage. Both factions claimed that the increase as well as higher prices for waste disposal and other public services meant extra costs of 200 Euros for an average Viennese household.

Austria’s inflation was 3.6 per cent in September, according to Statistik Austria. This means products and services on offer in the country cost 3.6 per cent more in September 2011 than in September 2010. Prices charged for car fuel, heating oil and gas were once more identified as the main causes for the comparably steep increase. The September 2011 inflation keeps Austria ahead of most other European countries as far as soaring prices are concerned. Eurostat, which carries out research for the European Commission (EC), considers other aspects than Statistik Austria. The organisation said Austria’s inflation rate was four per cent last month and 3.7 per cent in August when Statistik Austria found a 3.5 per cent increase of prices for various products and services.