Educational leave, extra income for the unemployed and various subsidies: they all fell victim to the new government’s savings. Now the Fiscal Council explains: that is far from enough, the budget of Austria is shrinking drastically in 2025 and 2026.
These budget numbers are great: with a minus of 4.4 percent, the tax council, the independent body for monitoring the fan discipline in Austria, expects to check the tax discipline for this year. The shortage is not much lower than in the previous year – it was 4.7 percent. Until now, the National Bank had taken 3.8 percent minus for 2025.
In fact, the savings package, the ÖVP, Spö and Neos should have compiled at the start of their legislative period – and still cords – at least before 2026. Just: the Fiscal Council also expects a minus of four percent in the coming year.
Are taxes now being increased?
The decrease from 2025 to 2026 would be about as high as from 2024 to 2025, where there were no drastic measures, removed subsidies and shortened social benefits. Of which, according to experts in an initial response, there must now be more, the savings package will probably have to be tightened and the taxes must be increased. The latter in particular was previously avoided that all parties are statements against higher or new taxes on different points in the election campaign in different formations.
Pensions, civil servants and long standstill
In comparison with the “Kroon”, economist Monika Köpper-Turyna explained the reasons for the budget minus who was still clearly too great: for example the costs for health care and pensions as a result of the aging of society, and the previous government also increased the civil service in the autumn, a cost factor of about a billion.
The long coalition negotiations are also the culprit: because measures have been taken very late this year, they are not yet full in the coming year.
Above all, however, the economy becomes considerably weaker than expected: “A percent less growth is reflected in the shortage of half a percentage point,” said Köppl-Turyna.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
