With shops, restaurants, bars, hotels, and cultural institutions all closed and reopening a distant hope, the Austrian government was forced to step up its support measures for the economy, with most based on existing programs. So far, the most prominent COVID-19 support measures are:
- Kurzarbeit (shorter-working hours) – a scheme allowing businesses to keep staff employed with a reduced work week, with the government covering up to 80% of salaries.
- The Fixkostenzuschuss (fixed costs subsidy) – a grant for regular expenses such as office rents, machine maintenance, software etc.
- The Verlustersatz (loss compensation) – a reimbursement to offset the huge revenue hits businesses have suffered during forced closure.
While the first two schemes were open to everyone, the third was primarily for businesses in the leisure sector, like restaurants, bars, hotels or cultural institutions. Now, Finance Minister Gernot Blümel (ÖVP) has announced an additional scheme for any company that suffered a drop in sales of 40% or more over the previous year.
- This so-called Ausfallsbonus (bonus for losses) can cover up to 30% of revenue from the same period last year, up to a maximum of €60,000 a month.
- It will be available “for each month until the end of the crisis,” Blümel said.
- The measure is expected to cost taxpayers about €1 billion in total.
“Click Four Times”
The application procedure would be “quick and easy” for anyone who applied for the Fixkostenzuschuss in the past, Blümel said. “You have to click four times, enter the total revenue from the comparison month, and then the money flows” he promised. The comparison period is the same month in 2019, and applications can be filed on FinanzOnline, as with the fixed cost subsidy. Applications can be submitted starting on February 16.
The main obstacle the government sees is EU law, which stipulates a maximum of €3 million in aid for lost revenue and no more than €800,000 in fixed cost subsidies for any individual company. These new subsidies, however, could well exceed these upper limits – particularly in Austria’s hard-hit tourism sector. So Austria, along with Germany, Denmark and Czechia, are seeking to increase this cap temporarily, Blümel said. The €800,000 limit is already set to increase to €1 million this year, with more adjustments to follow if needed.
Vice Chancellor Kogler (Greens) assured reporters that “after Easter, the times will change,” and asked businesses to be responsible in the interim. “Let’s not focus on where we can still find loopholes, but on how we can get through the last stage,” appealed the vice chancellor.
He also announced that the Kurzarbeit scheme – currently in place through March 2021 – will be extended once again, with details to follow.
Tests & Controls in the Tourism Sector
The tourism sector – hospitality, tourism and the event industry – have been especially hard hit. “This is an extremely frustrating state of affairs,” admitted Tourism Minister Elisabeth Köstinger (ÖVP). She had “zero understanding for black sheep,” Köstinger said, meaning companies that try to bend the rules while also getting economic support, following an ORF report that many hotels in Tyrol were accepting guests, despite the ban on overnight stays other than for business travelers – the exception providing a loophole. The minister announced “strict checks” by the Interior Ministry and “massive penalties” for those found breaking the law.
Köstinger also suggested a gradual re-opening after this lockdown, along with extensive testing of employees in the catering and hotel industry. She expects employees working in hospitality to be vaccinated as quickly as possible as a prerequisite for accepting guests.
The government plans to evaluate the situation every two weeks from February onward to decide whether reopening in March might be possible. “Tourism, freedom of travel, it will all take years to fully recover,” Köstinger admitted. However, she added, the hotel and restaurant industry will be given “the best possible support.”
The next season will show whether this will be enough to rescue ailing businesses.