Babler in press conference

Tax reduction: Apples become cheaper, bananas do not

On ORF's Pressestunde program, Vice-Chancellor Andreas Babler listed for the first time all the food items affected by the tax cut.(Bild: Screenshot ORF)

Watering can or not, effective against inflation or not? How to finance it? The VAT reduction was the biggest topic for Vice-Chancellor Andreas Babler in the ORF press conference – and for the first time, the entire list of items that are to become cheaper was presented.

Milk, eggs, potatoes, vegetables – including frozen ones, grains, salt, pasta, bread, and pastries: for the first time, the Vice Chancellor named the entire list of foods that will be affected by the VAT reduction to five percent. It is set to come into effect in July and will provide relief to those who "have to check their online banking before going shopping." Fruit is also on the list – but only from Austria. So apples yes, bananas no. 

The entire list

Milk, dairy products, and eggs:

• Milk (including lactose-free animal milk)
• Butter
• Eggs (from chickens)

Vegetables (fresh and chilled):

• Potatoes
• Tomatoes
• Onions, garlic, and leeks
• Cauliflower and kohlrabi
• Lettuce
• Carrots, beets, and celeriac
• Cucumbers
• Beans, peas, etc.
• Other vegetables (e.g., pumpkin, bell peppers, or asparagus)
• Frozen vegetables (e.g., peas, spinach)

Fruit:

• Fresh apples/pears
• Fresh stone fruit (apricots, cherries, etc.)

Cereals, milled products, and baked goods:

• Rice
• Wheat flour and wheat semolina
• Pasta (without filling)
• Bread and pastries (rolls, etc.), including gluten-free bread
• Table salt

The list is based on counter-financing ("We don't want to make the same mistake as previous governments") and is intended to strengthen domestic production. According to the Vice-Chancellor, a total of one-third of daily purchases will be affected. This will save each household just under 100 euros per year, or around 8 euros per household per month. 

In the ORF press conference, Vice Chancellor Andreas Babler named for the first time the entire list of foods affected by the tax cut.(Bild: Screenshot ORF)

The packaging and plastic tax should be largely sufficient to finance the tax relief. The reduction will cost 400 million euros, 200 million of which will take effect this year. "I am very proud of the package," said Babler. Although the SPÖ had entered the negotiations with significantly tougher demands. The industrial strategy was not a bargaining chip for NEOS and ÖVP. "It is a long-standing SPÖ demand."

Keyword expectations: A year has passed since the government was formed. Is the coalition taking too long to implement measures to combat the economic crisis? A clear "no" from Babler, who referred to the red prestige project of rent control. It was decided just a few weeks after the swearing-in ceremony.

Too slow, too little, too late?
"We are actually ahead of schedule," said the Vice-Chancellor, who considers the budget consolidation course to be successful. Nevertheless, there are challenges that could not have been foreseen in some cases. The states are being called upon to act, for example in the health sector. Recently, the ÖVP-led states have been more willing to compromise than in the past. And the red states—Carinthia, Vienna, and Burgenland? "You can talk to me about any proposal," Babler evades the question...

Healthcare must be guaranteed regardless of credit cards – without getting into the question of how this should be done. Data is being collected and a "variety of measures" are being considered. Babler continues to insist on a solidarity contribution from elective doctors for the health insurance system: "In the amount of ten to 15 percent."

The Vice-Chancellor sees no need to rush. While Fiscal Council chief Christoph Badelt recently insisted on a clear strategy by the end of the year, Babler first wants to gather information. "The analysis should be completed in the first quarter."

Shambles inside and outside the SPÖ
Babler evades the question of criticism from his own party about him as a person, saying that they have inherited a shambles from previous governments. The SPÖ is working together to clear up the mess. The question of the party leader is a "phantom discussion" in which the party will not participate. His goal for the party conference? "A joint strengthening." He will not name a percentage for the election.