“Adjust to Performance” – Financial Equalization: Countries Want to Redistribute Money


The federal states are demanding changes in the financial equalization, in other words: a new distribution key. This must be “adapted to performance”, as Vienna City Councilor for Finance Peter Hanke (SPÖ) and Vorarlberg Governor Markus Wallner (ÖVP) emphasized Friday after a state finance conference in Vienna. The period of financial settlement that has been running since 2017 will run – extended by two years – until the end of 2023.

Another “simple extension” without negotiations to adjust the vertical distribution key is not seen today, it was emphasized. Currently, taxpayers’ money is divided among the most important 68 percent (federal government), 20 percent (states) and 12 percent (municipalities). Before negotiations with the federal government began, they were unwilling to commit to a specific requirement about what the relationship should look like in the future. Discussions on the new financial equalization could, it was said, start this year.

Reason: Higher costs
The desired adjustment of the key was justified by higher costs and the desire for planning certainty. Core areas such as healthcare, health, education or climate protection are particularly affected here. High construction costs would also make investment more difficult. In addition, there is a “salary dynamic” given the rising wage costs, the country representatives explained.

“The starting position is extremely difficult,” Hanke warned. There are countless crises. In addition, earnings from earnings shares have declined, for example due to the abolition of cold progression. Now it is important to arrive at a “collusion of ranks”. This has now happened between the countries. A position paper has been drawn up for the negotiations.

“No time for arguing”
“There is no time for big pointless arguments and side issues”, Wallner was also convinced. The distribution of taxpayers’ money must be secured quickly. He spoke out against a unilateral shift of the burden, ie neither to the federal government nor to the federal states. “Everyone has to perform their duties and make sure they are fully funded.”

In any case, the countries are ready for talks. “We’re not asking too much,” the governor of Vorarlberg said. The two country representatives explained how much money was needed or how to design the key. However, they would not close themselves off from reforms and cost-cutting measures, it was assured.

Applying for an energy subsidy should be easier
The lack of access by public companies providing services of general interest to the federal government’s new energy cost subsidy was also criticized today. A request has also been made to make it easier for small and medium-sized enterprises to submit applications. In addition, the funding period should be extended to 2023.

Source: Krone


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