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Austria: Purchasing Power Shrinks

Published: April 8, 2014; 07:14 · (Vindobona)

Due to higher taxes and social contributions, the real income fell in the last few years.

Austria: Disposable Income Shrinks / Picture: © Vindobona.org

In summer 2012, the Swiss UBS has published a controversial study on Austria´s purchasing power. According to UBS, the real income of low-income earners fell by more than 25% from 2000 to 2010. The Federation of Austrian Industries and the Austrian National Bank rejected the study. Now, the Austrian Statistical Office confirms that the real income has been falling over the last years.

Compared to 2007, the disposable income of Austrian workers fell significantly, the Austrian Statistical Office (Statistik Austria) said in a press release. In 2013, real income was down for the third consecutive year. Last year, income from work was up by 3.1%. In the same period, investment income was down by 15%. Social contributions rose by 3.2% while total tax intake grew by 4%.

Corresponding to the decreasing purchasing power, the savings ratio has been falling for years. While total savings came at € 20bn in 2007, savings only reached € 12.2bn last year. In 2007, the savings quota stood at 12.5%. Six year later, the quota only came at 6.6%.