Measures to complement Austrian National Action Plan on employment

The Austrian National Action Plan on employment to be submitted to the European Council in June 1998 includes lists of measures to be taken in five areas over and above the four compulsory areas. These are research and development, exports, infrastructure, inward investment and the "informal" economy, and the measures are mostly aimed at improving the competitiveness of the economy.

On 15 April 1998, the Austrian Government agreed the country's National Action Plan (NAP) on employment (AT9802164F and AT9803172F). All EU Member States were required to draw up such plans based on the EU Guidelines for Member States' employment policies 1998, following the Luxembourg"Employment Summit" in November 1997 (EU9711168F). The plans are to be submitted to the Cardiff European Council in June 1998. In addition to the four areas which the NAP had to cover (employability, entrepreneurship, adaptability and equal opportunities) - and for which 19 guideline policies were drawn up by the Government - the Austrian plan defines five additional areas outside the immediate realm of employment and labour market policy in which action is to be taken.

The first additional area is technology-oriented research and development. Austria's research and development quota of 1.5% of Gross Domestic Product (GDP) falls below the EU average of 1.8%. In addition there are deficiencies in the transfer of know-how and technology between research facilities and enterprises. This is thought to diminish competitiveness and employment. The Government proposes 11 measures to improve the situation. These focus on: broadening the research base; networking between research institutions; mobility of personnel between research facilities and enterprises; incentives for applied research; better use of patents; and better access for small and medium-sized enterprises to research output and to venture capital. In the federal Budget, additional funding of ATS 1.4 billion for research was included for 1998 and 1999 taken together.

The second area is export promotion. The external trade deficit in 1996 was ATS 101 billion, and only 26% of GDP is made up of exports (compared with 32% in Finland and 57% in Belgium). It is estimated that every ATS 1 billion of exports results in 600 to 800 jobs. Six measures were devised to remedy the situation, two of which are already in force. ATS 600 million was budgeted for 1998 and 1999 to improve the institutional arrangements for the financing of exports and export-oriented investment, and to support companies in opening new markets and improving access to existing ones.

The third area is infrastructure. This addresses roads, rail and housing. The NAP emphasises the importance of transport facilities for economic development without mentioning the construction industry. It is obvious, however, that the primary goal of the projected ATS 22 billion of public investment annually is the maintenance of employment in the construction industry.

The fourth area, for which the federal Government does not need to budget funds, is inward investment by enterprises. It is expected that the Austrian Business Agency (ABA) will facilitate another 40 projects in 1998 involving ATS 2 billion of investment and creating 2,000 additional jobs.

The final area is the informal economy, where it is estimated that between 4% and 8% is GDP are created. The erosion of the tax and social security base and the incompleteness of data on which policy is based are seen as the primary problems associated with a growing informal economy. Its existence and growth is also seen as an indicator of disincentives for fully legal economic activity. Four measures to deal with this issue are outlined in the NAP: more control and sanctions; amendment of tendering regulations; better legal means to combat illicit employment; and a specialised agency (AT9712154N). Originally it was planned to agree on the detailed legislation itself, but Government ministries on the one hand and the social partners on the other could not reach agreement by the 15 April deadline. Additionally, in lieu of a fifth measure, there is a reference to the NAP's policy guideline 11 on the reduction of taxes on labour.

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