General inflation is not only a burden for Austrians, but also drives up government costs. Finance Minister Magnus Brunner must now take on new debt.
Next week, Finance Minister Magnus Brunner (ÖVP) will present his budget for 2024. It is a budget plan under difficult circumstances. Inflation not only causes costs to rise sharply, but also tax revenues.
Ultimately, there will be a financing gap of more than 20 billion euros next year, as shown by the budget documents available to ‘Krone’. Income of approximately 103 billion is compared to expenditure of 123 billion. However, the deficit in Maastricht will probably remain below the magical limit of three percent.
600 million euros more for teacher salaries alone
The Minister of Finance is particularly concerned about rising expenditure on personnel, pensions and interest. An example: the costs for teacher salaries in 2024 alone exceed the original budget plan by more than 600 million euros. The same calculation also applies to police officers, soldiers and other civil servants. The 9.7 percent pension increase this year will cost 5.3 billion euros, excluding civil servant pensions.
In addition, there is also the abolition of cold progression. This will cost the Minister of Finance 3.6 billion next year. Despite this significant tax cut, the minister collects additional payroll tax of 1.5 billion annually. Revenues are expected to reach 35 billion euros in 2024 and 37 billion euros in 2025. Thanks to inflation, sales tax revenues will also rise sharply between 2024 and 2025 – from around 38.5 to 40 billion euros.
Brunner also makes his ministerial colleagues pay
Inflation also dramatically increases the federal government’s interest burden. Government financing costs from January to May 2023 amounted to 4.4 billion euros, an increase of 1.5 billion or almost 50 percent compared to the same period last year. Three years ago, in 2020, this value was 1.2 billion. Faced with this burden, Finance Minister Magnus Brunner is resorting to a new method.
All departments must pay this interest proportionately; in total they contribute about 2.8 of the 4.4 billion euros. Brunner speaks to the “Krone” of a “solidarity contribution”. “Government budgets are feeling the effects of inflation on a large scale, for example in the form of rising payments for pensions, staff and rising interest rates.” Brunner reiterates that he wants to “reduce the sense of rightness in all institutions.” “Always saying ‘more’ doesn’t work in the long run.”
Source: Krone
I am Ida Scott, a journalist and content author with a passion for uncovering the truth. I have been writing professionally for Today Times Live since 2020 and specialize in political news. My career began when I was just 17; I had already developed a knack for research and an eye for detail which made me stand out from my peers.
