"Liquidity under threat"

Court of Audit tears Graz budget plans apart

In financial terms, the view from the clock tower has long since ceased to be unclouded.

(Bild: ©aero-pictures.de - stock.adobe.com)

On Thursday, the Graz municipal council is due to approve the double budget for 2025 and 2026. Prior to this, the statement published by the City Court of Audit on Wednesday caused a stir. The director also criticized City Councillor for Finance Manfred Eber.

Budget councils traditionally have a tough time. Hot discussions are guaranteed. So Thursday (December 12) is sure to be explosive. If only because of the fact that there are around 250 objections to be dealt with, which are directed against the planned cuts to the sports budget, as we have reported. Additional spice is now provided by a rather salty statement published early on Wednesday morning by the City Court of Audit on the planned double budget.

The auditing body believes that the city's economic survival is threatened by "unfinished homework" and external factors. Measures that have already been introduced, such as the so-called "Municipal Plus", are largely unsuitable. The liquidity of the state capital is therefore under acute threat.

City Court of Audit Director Hans-Georg Windhaber sharply criticizes the Graz budget.

(Bild: Opernfoto)

"It can be seen from the budget that the Finance Directorate is therefore recommending that the municipal council adopt a budget freeze of 12 million euros from January 1, 2025 - if the liquidity situation makes it necessary, a general budget freeze is even planned. This would immediately render the budget ineffective," Audit Court Director Hans-Georg Windhaber told the Krone.

"Uncontrollable standstill" threatens
He sees the fact that the city wants to make full use of its cash-strapped budget (a kind of overdraft facility provided by the state) as particularly problematic. "By the end of 2026 at the latest, we will be over the approved lines. Then there is the threat of an uncontrollable standstill, the city will no longer be able to raise money legally," Windhaber clarifies. He also considers the fact that City Councillor for Finance Manfred Eber (KPÖ) says that the increase in the framework by the state from the current 104 to 180 million euros is just a formality to be more wishful thinking than reality.

Windhaber and his experts also find the investments incomprehensible. According to the budget, two billion euros will be invested in Graz by 2030. In order to reduce debt, it is assumed that only 50 percent of this will be implemented. "So why am I even writing it in the budget? Above all, we know from the past that between 70 and 80 percent of the planned investments are actually implemented each year."

Graz City Councillor for Finance Manfred Eber (KPÖ)

(Bild: Christian Jauschowetz)

Eber is trying to calibrate
City Councillor for Finance Manfred Eber was obviously already expecting criticism, which is why he went public with a press release on Tuesday and tried to calm things down. The auditors would evaluate the budget "from a purely technocratic point of view". If the proposals were implemented, services such as childcare and education would have to be drastically cut and sports and cultural funding would have to be completely eliminated.

Windhaber is surprised by this, to say the least: "Because we did have a confidential discussion with the city councillor to incorporate his comments. However, he could not have been aware of the report on Tuesday. Nowhere do we mention the savings mentioned." However, savings must now be made where they can be influenced. "And that involves voluntary services. It's up to politicians to decide which ones to cut."

Violation of the rules of procedure
Eber had also violated the city's rules of procedure because he only sent the draft budget to the Court of Audit two weeks before the intended decision - and not four weeks before, as required. Therefore, only a superficial audit was possible.