Provisional budget comes into force: What this means for the state!

Provisional budget comes into force: What this means for the state!

The Austrian government is facing a financial test! Despite the constitutional obligation to present a budget proposal no later than ten weeks before the end of the year, this has not yet happened due to the National Council elections and ongoing coalition negotiations. Therefore, an automatic provisional budget will come into force on January 1, 2025 to ensure the functioning of the state administration and solvency vienna.at reported.

The automatic provisional budget is a constitutional emergency solution. It stipulates that the previous year's budget will be continued with the existing legal upper limits. However, the federal government is only allowed to take on new financial debt up to half of the maximum amounts approved for 2024. According to Parliament's budget service, this debt ceiling will probably be exhausted to its maximum before the middle of the year. Concrete figures from the last federal finance law show that a total of 114.4 billion euros in financial debt was planned for 2024, which drastically limits the financial scope for 2025 parliament.gv.at stated.

Optional action by the National Council

Alternatively, the National Council could decide on a legal provisional budget in order to expand financial scope through more flexible regulations. This could be submitted either by the MPs themselves as an initiative proposal or as a government proposal. There have been similar situations in the past: after the 2019 National Council election, an automatic provisional budget was also introduced, followed by a statutory provisional three days after the new government was sworn in. If no agreement is reached, authorities and ministries will be faced with the challenge of managing the allocated resources and responsibilities in accordance with the valid planning from 2024.