Austria's triple coalition: savings plans and reforms for the future!

In a decisive meeting at Ballhausplatz, the Austrian triple coalition from the ÖVP, SPÖ and Neos started their government exam. Chancellor Christian Stocker made it clear that it is primarily about planning for economic policy. The predicted budgets for the coming years are alarming: the need for savings could amount to up to 25 billion euros. This presents the coalition with an enormous challenge, especially since it wants to be against an impending EU deficit procedure, as kosmo.at

WIFO boss Gabriel Felbermayr and IHS director Holger Bonin were consulted as consultants to support the government members. Felbermayr emphasized the urgency of a comprehensive plan for the entire legislative period, since the current budget forecasts require serious renovation. Savings of 6.4 billion euros and 826 of 8.7 billion euros are provided for 2025. At the same time, Christoph Badelt, President of the Fiscal Council, warned in an ORF press conference of the long-term consequences of inadequate budget planning, especially with regard to demographic development in Austria, such as orf.at reported.

Significant challenges in the budget

The mentioned difficult economic framework conditions require quick action. As Stocker explained, the question remains how the coalition can find a balance between necessary savings and economic measures. During the exam, tax measures, such as asset and inheritance taxes, were also discussed as potential sources of financing, but was rejected by the coalition until further notice. Instead, the government plans to reduce costs in the long term with clever investments, especially in the care sector.

In order to reduce the pressure, the government hopes that the defense costs are relieved of the requirements of the stability pact in order to create more scope in the budget. In the exam, the strategies to ensure economic stability and to improve the location were also emphasized, whereby the energy market and competition should be in the foreground in order to strengthen the quality of the location and to revitalize the economy despite the impending recession.