Domestic companies are making clear demands in the 2024 election year
Vienna (OTS) – Austria as a business location can look back on a decade of standstill – and the danger of decline is greater than ever. A current study by Deloitte comes to this sobering conclusion. In order not to endanger prosperity, a master plan is needed now: the goal must be to be among the top 5 in Europe by 2030. In addition to a new mindset, noticeable reductions in taxes and additional wage costs are essential. Only then can there be a sustainable and future-oriented transformation of the economy.
For the tenth time, the international competitiveness of the Austrian business location was analyzed as part of the Deloitte Radar. For the anniversary edition, around 600 top domestic executives were interviewed and the most important global indices were examined. The sobering conclusion: The Alpine republic has had a decade of standstill behind it – and that is reflected in the general mood. Almost every second manager surveyed rated the mood at the location as “enough” or “not enough”.
“Austria is at best in the middle of the global competition and has increasingly lost its attractiveness and competitiveness in recent years. Comparable European countries such as Denmark, Norway, Switzerland and Sweden have long since moved away. This creeping downward trend must urgently be reversed,” emphasizes Harald Breit, CEO of Deloitte Austria. “We have to measure ourselves against the best and start catching up. To achieve this, numerous levers must be set in motion – starting with the long-overdue reduction in taxes and duties, through effective measures against the labor shortage and through to investments in future fields.”
Noticeable tax and cost reductions as a central lever
Companies have been complaining about the high costs and taxes for years. This year too, half of the managers surveyed rated the area of corporate and income taxation as “not enough” or “enough”. Many would like to finally see a turning point in the election year of 2024. According to the survey, reducing income tax, VAT and non-wage labor costs is a top priority for the economy.
“Against the background of the ongoing shortage of skilled workers, further tax relief for labor is absolutely necessary in order to address the scarce human resources at home and abroad,” explains Herbert Kovar, Managing Partner in the Tax & Legal department at Deloitte Austria. “In addition, massive capital is also needed so that business models in Austria can be adequately changed – not least in the direction of the green economy. To achieve this, the tax measures should finally be designed in such a way that they do not have a deterrent effect on investors.”
Another stumbling block is the cumbersome administration: 58% currently rate the bureaucracy in this country as “not enough” or “enough”. Accordingly, measures to reduce bureaucracy are also high on the wish list of domestic companies.
Leverage untapped potential in the labor market
In addition to high taxes and excessive bureaucracy, the main concern for Austrian companies is the lack of workers. In particular, the majority of respondents only rate the availability of skilled workers as “not enough” or “enough” (47%). At the same time, many opportunities remain unused in the labor market. There is untapped potential, especially in the employment groups of women and older, experienced employees as well as among people with a migrant background.
“Companies are aware of the untapped workforce potential, but they need political support to leverage it. The demands are clear: an expansion of the childcare offerings for small children, especially for the benefit of the many part-time mothers, easier additional income opportunities for pensioners and, last but not least, faster access to the labor market and a qualification offensive for people with a migrant background,” says Elisa Aichinger, partner in consulting at Deloitte Austria , the recommendations for action are straight to the point.
Invest intelligently in transformation topics
In order to catch up with the top European field, targeted investments in the major future fields are also necessary. An important point is the energy transition. The Russian war of aggression against Ukraine made Austria’s dependence on Russian gas painfully clear. Little has changed so far, local companies are still concerned: not even half (45%) see the location as “good” or “very good” in terms of gas supply security. In order to change that, it is now important not only to develop new supply sources and transport routes, but above all to accelerate the expansion of renewable energies.
Another focus of investment must be on the topic of digital transformation. Comprehensive digitalization of administration, education and health systems could make processes more efficient. Strengthening research and teaching in the area of digital technologies would promote innovation.
“Austria has lost prospects for the future in the last few years of crisis and now urgently needs to refocus. The companies already have the right mindset and clear ideas about what it takes to achieve a top position in Europe. “It is now up to politicians to take action after the upcoming elections at the latest,” concluded Harald Breit.
To download:
Study Deloitte Radar 2024
Graphic “Indices Ranking Austria 2013 – 2023” Credits Deloitte
Graphic “World Competitiveness Index 2023 – European comparison” Credits Deloitte
Group photo 1 credits Deloitte
Image description (from left to right): Herbert Kovar, Elisa Aichinger and Harald Breit
Group photo 2 credits Deloitte
Image description (from left to right): Herbert Kovar, Elisa Aichinger and Harald Breit
Photo Harald Breit Credits Deloitte/feelimage
Foto Herbert Kovar Credits Deloitte/feelimage
Photo Elisa Aichinger Credits Deloitte/feelimage
Deloitte Austria is the leading provider of professional services. With around 1,900 employees at 15 locations, companies and institutions are supported in the areas of auditing, tax advice, consulting, financial advisory and risk advisory. Customers benefit from comprehensive expertise and in-depth industry insights. Deloitte Legal and Deloitte Digital complete the extensive range of services. Deloitte sees itself as a smart source of inspiration for Austria as a business location. The Deloitte Future Fund sets initiatives in the social and societal areas. As an employer, Deloitte aims to be the “best place to work”. More at www.deloitte.at.
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Deloitte Legal refers to the ongoing cooperation with Jank Weiler Operenyi, the Austrian law firm in the international Deloitte Legal network.
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