VRANITZKY'S MISSION TO REFORM
Franz Vranitzky is the third finance minister in Austria in the last five years. Unlike his predecessors, the charismatic Hannes Androsch, or the unfortunate Herbert Salcher, Vranitzky is a determinedly uncontroversial figure. Yet he has done more in the last 16 months of his office than his predecessors were able to do, revitalizing the Vienna Borse and making equity investments a growing part of Austrian capital formation. He has cut taxes; he has moved decisively to tackle the budget deficit. Above all, he has remained in public favour even while disquiet is growing over Voest Alpine and government subsidies for nationalized industries.
He began his term of office auspiciously in 1984, by cutting from 7.5 to 5% a special tax on interest income. The tax, a revenue-raising measure, had been introduced earlier that year by Salcher and is levied in addition to income tax. Austrian investors had immediately begun an unprecedented search for alternate fixed-interest income, causing a major capital outflow, Asch12 billion in 1984 and Asch15 billion in 1985.
But Vranitzky's most important move has been to remove the bias against equity investment in the country and redress the tax anomalies which have kept the stock market in Vienna moribund for the last 18 years.