Bureaucracy as a growth brake: entrepreneurs demand quick reforms!

Bureaucracy as a growth brake: entrepreneurs demand quick reforms!

Austria's economy is currently faced with serious challenges that are reinforced by an increasing bureaucracy. According to the Industrial Association , companies issue an average of 2.5% of their sales for compliance with bureaucratic regulations. Georg Knill, President of this Association, emphasizes that the exuberant bureaucracy not only affects the companies, but also traces urgently needed scope for action.

In the past ten years, EU regulation has doubled and contributes to the burden on companies. The estimated bureaucracy costs in Austria amount to up to 15 billion euros a year, which corresponds to up to 3.8% of GDP. These enormous costs hinder investments in research, growth and the creation of new jobs.

suggestions for relief

In order to counteract this negative development, the industrial association proposes various measures to relieve bureaucracy. These include:

• simplification of the balance sheet creation by avoiding double explanations according to national and international guidelines.
• reduction in employee mobility, especially with regard to wage bills and double time recording.
• Abolition of the minimum body tax, which is largely regarded as minor tax.
• termination of the so-called gold plating, which leads to overfilling EU regulations.

In addition, the need to make educational institutions more efficiently. This includes optimization of the educational directorates and the painting of unnecessary administrative activities. This could help to significantly reduce the bureaucracy effort in this area.

EU initiatives to strengthen competitiveness

At the European level, the EU Commission, led by Ursula von der Leyen, plans to strengthen competitiveness as a central concern of the new legislative period. In mid -January, the presentation of a “compass for competitiveness” is planned, which covers the areas of innovation promotion, reduction of strategic dependencies and agreeing decarbonization with competitiveness. However, it remains unclear whether this concept will actually put new impulses or only update existing policies.

In addition, a strategy for a “Clean Industrial Deal” is to be published at the end of February. Among other things, this strategy includes action plans to improve the location factors, including the automotive and chemical industry as well as for decarbonization. A comprehensive act of law to reduce administrative expenses could seriously tackle the reduction in bureaucracy, which is required by the EU member states.

According to a survey in the IHK company barometer for the European elections in 2024, 95% of the respondents consider the reduction in bureaucracy as the top priority. Further initiative is also planned, including a new internal market strategy in June 2025 and a law to strengthen the circular economy for 2026. There is hope that these measures will promote the competitiveness of the German economy, provided they go beyond mere declarations of intent.