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Fiscal Sustainability Amid Demographic Change

Explore fiscal sustainability in face of demographic shifts - indicators, insights, and lessons from Austrian Public Audit.

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Fiscal Sustainability Amid Demographic Change

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  1. 6th Meeting of the INTOSAI Working Group on Key National Indicators Austrian experiences about sustainability indicators in the field of demographic change Elisabeth DEARING, SAI of Austria

  2. Content • Fiscal sustainability facing demographic changes • Scope of the audit • Lesson learnt Elisabeth DEARING, SAI of Austria

  3. Fiscal Sustainability • Fiscal sustainability relates to the ability of a government to assume the financial burden of its debt currently and in the future • Fiscal sustainability indicators provide a firm basis to identify the size and the main source of risks to public finance sustainability in a long-term perspective Elisabeth DEARING, SAI of Austria

  4. Sustainable Development Indicators (EU) Theme 4 - demographic changes Source: EUROSTAT 2011 Elisabeth DEARING, SAI of Austria

  5. Public pensions expenditures as additional costs of an ageing population • Austrian Federal Financial Statement 2011 • Public pensions expenditures: 25, 2 % of the total expenditures • pension expenditures for public servants 8 bn EUR • impact on fiscal sustainability Elisabeth DEARING, SAI of Austria

  6. Scope of the audit • Performance audit on the impact of legal and HRM measures on the duration of employment • covers 3 ministries (interior, justice, labour and social affairs) • around 45.000 public servants • Focus on incentives for • the organization • the individual public servant Elisabeth DEARING, SAI of Austria

  7. Audit procedure • Collection of data on all public servants* from 2008 until 2012 • Analysis of the data • Share of different forms of retirement (e.g. inability to work, at legal retirement age) • Retirement age • Differences between e.g. • police and general administration officers • men and women * including permanent civil servants and contractual staff Elisabeth DEARING, SAI of Austria

  8. Lesson learnt I • Choice of the indicators influences process and results of auditing • Technical difficulties might influence the choice of the indicators • „Employment rate of older workers“ is not productive at institutional level Elisabeth DEARING, SAI of Austria

  9. Lesson learnt II • Retirement age as starting point to bridge the gap between macroeconomic indicators and audits at institutional level • Recommendations for the ministries beyond simply „ raising the retirement age“ e.g. • Focus on „retirement because of inability to work“ (individual incentives) • Integrate financial responsibility and HRM as incentive for the organisations Elisabeth DEARING, SAI of Austria

  10. Elisabeth Dearing dearing@rechnungshof.gv.at Phone: 0043 711 71 - 8814 Elisabeth DEARING, SAI of Austria

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