VIENNA: Austria’s labour minister yesterday urged the government to push ahead with tax reform to boost growth after the unemployment rate in December jumped to its highest for at least two and a half years.
Rudolf Hundstorfer’s Social Democrats want to introduce a tax on the super-rich to help finance tax cuts for people on lower incomes but coalition partner the People’s Party opposes such changes.
Hundstorfer listed the tax reform, a housing construction programme and a European Union-wide ¤315bn ($380bn) investment plan as crucial steps to fight unemployment. His statement echoed comments made after previous jumps in the jobless rate.
He told ORF radio he did not expect any improvement in the job market until the second half of the year and no real change of trend in unemployment until 2016.
Data showed unemployment rose to 10.2 percent in December, compared with 8.7 percent in November and 9.5 percent in December 2013. Under seasonally-adjusted EU definitions, the rate is 5.1 percent, second-lowest in the bloc after Germany.
Austria’s main economic research institutes slashed their 2014 and 2015 growth forecasts for the export-dependent economy last month as a tepid euro zone recovery and the conflict in Ukraine tensions weigh on sentiment.
The dispute over tax reform threatens to bring down the coalition of social democrats and conservatives should they not agree on a package by a self-imposed March deadline.
Reuters
