Austria in the financial crisis: Reforms required instead of pure renovation!

Austria in the financial crisis: Reforms required instead of pure renovation!

Austria faces major financial challenges that not only require short -term savings measures, but also in -depth reforms. The Neos club chairman Yannick Shetty, who emphasizes the urgency of these measures, takes this view. He points out that the need for renovation is clearly recognizable in view of the current deficit and the tense economic situation. The Federal Government has known itself for a consolidation course in the double budget 2025/26 to secure the financial future of the country, but simple renovation alone is not enough. Instead, modernization at all levels is necessary to achieve long -term stability and avoid old structures.

Central knowledge from the current budget development is the net need for the federal government, which is estimated at 15.4 billion euros from January to September 2024. This is a deep cut: the payments in the same period are expected to be 10.1 billion euros, which corresponds to an increase of 13.1 percent compared to the previous year. The main reasons for the increasing payments are to be found in the higher pension expenditure, the new financial equalization and the increased personnel expenditure, supplemented by middle increases in areas such as climate and security. In view of these developments, Shetty appeals to all political levels - the federal government, the states and municipalities - to seek savings in order to improve the financial situation.

reforms and changes

The weak development in the income, especially in sales tax volume and in the real estate sector, also exacerates the situation. In addition to these challenges, however, there is also a dynamic development in the case of wages -dependent taxes, especially wage tax. Budget development has deteriorated since autumn 2023, which is due to the ongoing economic crisis measures such as the electricity price brake and the reduction in energy tax. In addition, unexpected costs have been added by the flood disaster.

The effects of these financial challenges also have medium -term perspectives. The Austrian stability program 2023 outlines household planning by 2026 and includes compliance with the EU fiscal rules, which have been largely exposed to since 2020. In the context of a moderate economic growth and a high but falling inflation rate, it is expected that the Maastricht deficit of 3.3 percent of GDP for 2024 will be influenced by various initiatives. Experts forecast a deficit of 3.6 percent of GDP, which further burdens the budget situation.

effects on the population

The high inflation also means that nominal tax revenue increases, but the expenses also increase significantly. A challenging situation that is difficult to circulate in the coming years. It is still expected that the debt rate-due to the higher deficit and the lower GDP growth-will be 79.3 percent of GDP for 2024. In order to counteract this decline, sustainable reforms and a clever housekeeping are essential. The NEOS therefore call for courageous decisions to create scope for relief in the long term and to secure the financial stability of Austria.