"Austria Plan"

The ÖVP ministers’ billions of euros

Catalog of measures for the budget: Finance Minister Magnus Brunner

(Bild: APA/Georg Hochmuth)

From subsidy brakes to reform of the social system: Magnus Brunner and Martin Kocher present a detailed program for budget restructuring and increased efficiency in the middle of the election campaign.

The ÖVP's "Austria Plan" is taking shape. Finance Minister Magnus Brunner and Economics Minister Martin Kocher present a strategy for counter-financing. Focus: leveraging potential and efficiencies, eliminating duplication and new budget approaches. The departments are to justify each budget item anew each year and all regional authorities are to undergo an expenditure check.

Magnus Brunner: "The initiatives for the economy and performance are particularly important for Austria as a business location: a well thought-out mix of relief and performance incentives that will strengthen Austria's economy in the long term." The Austria Plan also includes a commitment to a balanced budget - something that has been sorely missed by renowned economists recently. "And we have a concrete plan for financing. The aim is to introduce new and innovative budget approaches, increase overall spending efficiency and trigger more growth and employment."

Minister of Economic Affairs Martin Kocher

(Bild: APA/HELMUT FOHRINGER)

All budget items are to be renegotiated in the new budget. "Austria needs a stronger anchoring of spending checks. We have made this a priority in the new financial equalization scheme. We are also setting up an interministerial working group to increase efficiency in public administration."

The Minister of Economic Affairs and Labor states that in view of the potential outlined above, it is possible to quickly create additional budgetary leeway. "Also through measures for strict budget implementation and by avoiding expensive but unsustainable decisions shortly before the election in a free play of forces." In terms of labor market policy, the aim is still to get people into work more quickly and to create incentives for full-time work. "Work is the best safeguard against the risk of poverty. This is how we ensure the long-term stability of our welfare state."

The planned measures in detail: 

Zero-Based Budgeting & Spending Review: In its current country report on Austria, the OECD recommends stronger anchoring of spending reviews (spending checks). This leads to the identification of duplication and efficiency potential. In other countries, around eight percent of expenditure could be reduced in this way. Savings potential according to the government: 3.5 billion euros.

Subsidy brake & expiry of crisis measures: In 2022, Austria spent 33.4 billion on general government subsidies. This is the seventh highest subsidy rate in the EU. If the EU level of 6.7 percent of GDP were achieved, 3.5 billion could also be saved.

Efficiency in public administration: an evergreen. The administration is now facing a wave of retirements. 45 percent of all federal civil servants will be leaving soon. Digitization is creating considerable efficiency potential that needs to be exploited. Replacements should once again be increasingly demand-oriented. A hiring freeze is not planned. Overall, savings of one billion are possible.

Strengthening performance incentives in the social system: The social system is to become more performance-oriented. By reducing the unemployment rate and reforming the system with faster and more targeted placement of jobseekers, up to two billion could be saved. In addition, immigration into the welfare system is to be stopped and the influx of qualified workers increased instead.

Growth and employment. According to Brunner and Kocher, the volume of work could be increased by increasing performance incentives. Through a location promotion law, tax credits and guarantees instead of direct subsidies, as well as incentives for relocations, "we can trigger more investment. By reducing bureaucracy and focusing more on research and innovation, we can increase productivity."

A significant increase in economic growth is thus possible. In addition, tax cuts would have a certain degree of self-financing. According to EcoAustria, this is around 40 percent (study on the abolition of the cold progression). "That alone would be around four billion according to our model."