Discussion about the situation of small and medium-sized businesses
Vienna (PK) – A comprehensive report on the EU plans for 2024 was presented today with Economics Minister Martin Kocher Economic Committee discussed by the National Council. The European Commission’s 2024 work program is characterized, on the one hand, by numerous current challenges and crises, but also by numerous initiatives to promote economic growth and European competitiveness. As the end of the legislative period and the upcoming elections to the European Parliament in June 2024 loom, the focus is on intensifying cooperation with the Council and the European Parliament in order to achieve as many resolutions as possible on outstanding dossiers. In addition, 15 new initiatives have been announced, the Minister of Economic Affairs announced. The report was accepted by a majority, without the votes of the FPÖ.
The report “SMEs in Focus 2023” provides information about the situation and development of small and medium-sized enterprises (SMEs) in the Austrian economy and was also on the committee’s agenda today. The report was accepted by a majority with the votes of the ÖVP, FPÖ and the Greens. At the request of NEOS, it was not finalized in the committee and will therefore also be debated in the plenary session of the National Council.
Another report from the Ministry of Economic Affairs on the disbursements for measures from the COVID-19 crisis management fund and from the hardship fund for December 2023 (III-1105 d.B.). In December 2023, no more payments were made, but €3,000 in payments were recorded from funds from the COVID-19 crisis management fund for processing costs in connection with the assumption of liability for tour operators.
EU projects in the areas of work, business and tourism for 2024
The report of the Minister of Economic Affairs on the EU projects for 2024 (III-1111 d.B.) was generally praised by members of the Economic Affairs Committee for its comprehensive overview of complex matters. Laurenz Pöttinger (ÖVP) found that the report presented the Austrian positions very clearly and clearly highlighted the added value for Austria of inclusion in the discussions at EU level.
However, not all projects received the unanimous approval of MPs. Gerald Loacker (NEOS) viewed the new initiatives that are to be presented in the areas of employment and social affairs as part of the Belgian Presidency in the first half of 2024 as an example of the “unworldliness” of many EU proposals. He referred, for example, to the right to switch off and telework. The European Commission’s initiative to reduce reporting requirements by 25 percent would undoubtedly be an important initiative to reduce bureaucracy and increase competitiveness, but it must be pursued consistently, said the MP. Loacker also wanted to know whether Austria, in addition to supporting the Critical Raw Materials Act (CRMA) on raw material supply security, was also taking initiatives to promote the conclusion of bilateral raw material partnerships, as other countries would also do. His parliamentary group colleague Karin Doppelbauer also asked about the status of the CRMA.
Economics Minister Kocher noted that Austria was interested in the negotiations being conducted by the EU with Canada and Australia. The talks with Australia are difficult because there are concerns from Austrian agriculture. But these are common concerns and Austria is taking a constructive stance.
In the area of tourism, among other things, a revision of the package travel guidelines is pending, said Elisabeth Götze (Greens). She wanted to know whether steps against excessive cancellation fees were also being considered. Minister Kocher informed her that he did not yet know any details about it.
The European Net Zero Industry Act (NZIA) for clean energy technologies in and from Europe is seen by the Austrian side as an important response to the USA’s Inflation Reduction Act (IRA), said Jakob Schwarz (Greens). However, further measures would also have to be taken to improve the competitive conditions for the EU.
Kocher referred to efforts to modernize EU competition law, a directive to prevent greenwashing that must be implemented into national law by the beginning of 2026, and a ban on products made from forced labor. The EU Chips Act for semiconductor production, which has already come into force, and a reform of the electricity market design go hand in hand with the Net Zero Industry Act. Other important topics for Kocher in this context are the revision of EU state aid law and the associated focus on future-oriented areas such as climate, energy, digitalization, research and development as well as the provision of risk financing. In the area of corporate financing, according to Kocher, the InvestEU program is expected to trigger a new investment boost of up to €372 billion in additional funds through an EU budget guarantee in the period 2021-2027, thereby providing further impetus for investment, innovation and job creation in Europe give.
The directive to improve working conditions in platform work is an important step for Christoph Matznetter (SPÖ), as an important development is emerging here that should not be missed. Minimum rules must be introduced in good time to prevent undesirable developments. Economics Minister Kocher told the MP that he was awaiting the EU Council’s results on the platform work directive. Austria has always supported the previous proposals.
Elisabeth Götze (Greens) regretted that no agreement could be reached on the EU supply chain law (Corporate Sustainability Due Diligence Directive, CSDDD). Maximilian Linder (FPÖ), on the other hand, saw no added value in such a regulation at the European level, as it would only bring more bureaucracy, especially for Austrian SMEs. Laurenz Pöttinger (ÖVP) also feared that the EU supply chain law in the currently proposed version would be a burden, especially for small companies. Christoph Matznetter (SPÖ) called the argument put forward at the meeting that the supply chain law would primarily burden medium-sized businesses “absurd”. SMEs in particular are burdened the most by the unfair production conditions in other countries. Committee chairman Peter Haubner (ÖVP) emphasized that Austria fundamentally supports the aim of the directive. However, the current version would have actually led to excessive bureaucracy.
From the point of view of the Minister of Economic Affairs, maintaining the proportionality and practicability of the regulations in the Supply Chain Act is essential in order to create legal certainty for those affected and companies. The previous proposals would have meant a lot of bureaucratic effort without ensuring that the goals were achieved. Rather, there would be a risk that companies in the Global South that one actually wants to support would be faced with insoluble tasks and could fall out of the supply chains without there being any misconduct in the sense of unethical practices. Due to the divergent views within the Austrian federal government, Austria has therefore decided on the path of “constructive abstention” both as a general approach and within the framework of changing the Council’s negotiating mandate. Negotiations will now continue.
SME report shows high innovative spirit among small and medium-sized companies
Economics Minister Kocher presented the National Council with the report “SMEs in Focus 2023” on the situation of small and medium-sized enterprises (III-1123 d.B.). In the Economic Committee, the MPs had the opportunity to ask detailed questions of the head of the “KMU Research Austria” institute and author of the report, Thomas Oberholzner.
Oberholzner presented a series of figures that underline the importance of SMEs. In 2022, there were around 601,300 small and medium-sized enterprises (SMEs) in Austria, which corresponded to 99.8% of all companies in the market-oriented economy in this country. According to the 2022 report, more than 2.4 million people, or two thirds of all employees in the economy, worked in an SME. In addition, around six out of ten apprentices were trained in small and medium-sized companies. In 2022, the turnover of SMEs amounted to €626 billion or 58% of the total turnover of the market-oriented economy.
In 2021 and 2022, SMEs experienced a significant recovery after the corona pandemic. The number of SMEs increased by around 4% (2021) and around 2% (2022), Oberholzner explained, and employment in both years was around 3% above the level of the previous year. The economy will weaken again in 2023. According to forecasts by the European Commission, the gross value added of SMEs will have increased in nominal terms (+8%) in 2023, but will have declined in real terms (-1%).
Oberholzner viewed the high proportion of innovative SMEs as a particular strength, which in the long-term comparison increased from around 54% (2010 to 2012) to around 60% (2018 to 2020). Start-ups or creative industries companies, for example, are particularly keen on innovation. Other clear strengths of Austrian SMEs are their high level of internationalization, good access to financing and a strong focus on sustainability. Oberholzner also sees challenges for Austrian SMEs in the areas of digitalization, e-commerce activities and the use of AI technologies. There is still a need to catch up in venture capital financing. Access to skilled workers is currently particularly difficult for small and medium-sized companies.
Elisabeth Götze (Greens) wanted to know how the issue of equity capitalization had developed. The shortage of skilled workers is an important issue that needs to be kept in mind. It is pleasing that Austria has now moved up to the group of Strong Innovators. Oberholzner said that equity capital had been an issue for a long time, but that there was now a significant improvement here.
From the point of view of MP Kurt Egger (ÖVP), Austria is not only confronted with a shortage of skilled workers but also with a shortage of workers, which threatens to worsen in the future due to demographic developments.
Oberholzner saw the labor shortage primarily in the area of highly qualified workers. It is therefore particularly important to strengthen research and innovation in companies.
Maximilian Linder (FPÖ) wanted to know to what extent SMEs were also burdened by bureaucracy. He also asked whether many one-person companies are also based on workarounds from the shadow economy.
Oberholzner said that bureaucracy was actually an issue, because even if many of the requirements did not formally apply to SMEs, they still had an impact on them. In his opinion, the decision to become an EPU was mainly made because it was more attractive for many people to work independently, and not because someone was pressured into it.
Economics Minister Martin Kocher emphasized that it is important to improve the financing security of Austrian companies. The federal government is also continually taking steps to improve the supply of skilled workers. As far as the supply of workers is concerned, it will also be important to promote mobility within Europe. On the question of risk capital, the minister said that due to the lack of large funds, it was difficult for Austria to create sufficient supply at the national level. Europe must undoubtedly become more attractive for investment so that capital does not migrate to the USA. (Conclusion of the Economic Committee) sox
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