Chamber of the Economy presents reform plans

In August 2000, the leadership of the Austrian Chamber of the Economy, the country's main employers' body, presented a plan for a comprehensive reform of the Chamber. A fundamental restructuring of its organisation and a redistribution of tasks should make possible a substantial reduction in the Chamber's much-criticised membership dues.

The Chamber of the Economy (Wirtschaftskammer Österreichs, WKÖ) is Austria's main employers' organisation, with membership compulsory for companies. Its recently elected president, Christoph Leitl- also the chair of the influential Östereichischer Wirtschaftsbund (ÖWB), the business organisation affiliated to the conservative Austrian People's Party (Österreichische Volkspartei, ÖVP) - had pledged himself to substantial reforms of the Chamber during his electoral campaign (AT0004217N). ÖWB has also conducted an opinion poll among WKÖmember companies, in order to determine their attitude towards the organisation's form and function and their wishes on reforms (AT0005219N). The opinion poll revealed a high level of support for reform in various areas. The poll's findings have been largely reflected in a comprehensive reform plan presented by the Chamber's political leadership at a session held on 25-26 August 2000.

Reform plans

The main points of the reform plan for the Chamber of the Economy and its regional Chambers are set out below.

Membership dues and finances

Compulsory membership dues paid by WKÖ member companies amount to around ATS 7 billion in 2000, out of the Chambers' estimated total budget of ATS 9.1 billion. The reform plan aims to cut total membership dues by ATS 2 billion, or by 30% on average for member companies. This will mean a cut of 22% in the Chambers' budget. The reduction should take place at the beginning of 2002. Furthermore, membership dues, which currently vary between federal states (Länder) and branches, are to be standardised in the coming years. In this context, many services offered by the Chambers will be provided at higher, cost-covering prices in the future. This alternative to higher membership subscriptions was deemed as an attractive option for financial reform in the recent opinion poll.

Additional income is expected from charging higher fees for participation in business fairs and higher revenues from the Business Promotion Institutes (see below). In total, the WKÖ president is planning additional income of ATS 600 million within the next five years. Already in 2001, the WKÖ budget is to be cut by 10%, in order to build up reserves for the restructuring of the Chambers. Mr Leitl also announced that there would be "consequences for the Chambers' 5,000 employees", but made no comment on the number of planned dismissals. WKÖ is also planning to extend its representative bodies at the EU level and to other international organisations, which are estimated to cost ATS 200 million to ATS 300 million a year. Furthermore, WKÖ intends to provide additional services for companies operating in the "new economy". WKÖ has attracted criticism from these firms, which regard their field as under-represented in the Chambers' traditional sector-based structure .

Division of tasks

The reform of WKÖ and its regional chambers will involve a redistribution of tasks between the various structures. WKÖ will thus concentrate on interest representation at the federal and EU level, the provision of internal services and coordination functions. The regional chambers, which exist in all Länder, and their local subunits (Bezirksstellen), will be responsible for interest representation at the regional and local level and the provision of services for members. The new leadership of WKÖ intends to establish "competence centres" at the level of the individual federal states, in which specific knowledge (eg on labour law) is to be concentrated.

Sectoral restructuring

Another important aspect of the reform is the restructuring of sectoral and subsectoral units. WKÖ currently has six federal sections - covering small-scale craft production, manufacturing industry, commerce, finance, banking and insurance, transport and communications, and tourism - and about 900 federal sectoral subunits (Fachverbände). The sections are to be replaced by three branches (Sparten), covering production, commerce and services. Subsectoral units in neighbouring branches will combine in 15-20 more comprehensive "branch units" (Branchenverbände) through cooperation contracts. WKÖ officials have stressed that the legal status and collective bargaining competence of the various existing structures are to be maintained in the new system.

Foreign trade offices

WKÖ's foreign trade offices (Außenwirtschaftsorganisationen) represent an important facility for business. Some 90 offices exist worldwide in Austria's major trading partner countries, which offer Austrian companies assistance with foreign business. These offices will also be affected by restructuring. Their number is to be reduced and the remaining offices will be formally separated from the organisational structure of the Chamber of the Economy. This measure is regarded to have a considerable potential for expenditure cuts. The offices' services should increasingly be provided on a cost-covering basis. Furthermore, important offices be run in cooperation with other agencies, such as the Austria Tourist Board (Österreich Werbung).

Business Promotion Institutes

The WKÖ's Business Promotion Institutes (Wirtschaftsförderungsinstitut, WIFI) at federal and regional level are among Austria's largest further-training institutions. Under the restructuring plan, the federal WIFI should be reduced considerably in size and its responsibilities should focus on management and coordination functions only. WIFIs will be run as "profit centres" in the future.

Voting rights

The new WKÖ leadership is determined to introduce a new system of voting rights for the Chamber's member companies, without specifying details of the reform. WKÖ general elections are based on the principle of "one firm, one vote". This is a rather unusual, since employer's organisations in most counties weight voting rights according to the size of the member firms (AT0004217N). In the view of the WKÖ leadership, the organisation's presidium should also be restructured: the presidents of the regional chambers will be members of the WKÖ presidium, along with six representatives of the sectoral units.

Timescale

A discussion about the proposals, along with approval by the competent bodies, should take place in 2000 at all levels of the Chambers. Implementation of the various measure should occur in 2001, and the new finance system is to be introduced in January 2002.

Commentary

The Chamber of the Economy's reform plan means a substantial change in its structure. This initiative may be seen as a response to repeated criticism of WKÖ's membership dues, traditional organisational form and policies. The new right-wing coalition government has also discussed interventions in order to promote reform in Austria's public-law interest representation organisations (ie the various Chambers representing business and employees). The WKÖ's reform plan puts some pressure on the Chamber of Labour (Bundesarbeitskammer, BAK), which had been criticised by the government because of its allegedly high membership dues and unwillingness to implement reform. (Angelika Stueckler, University of Vienna)