Wifo boss praises

Tyrol as a role model? “The state would have fewer problems”

Tyrol is ahead of the eight federal states in one respect - Wifo boss Gabriel Felbermayr derives recommendations from this.(Bild: Christof Birbaumer)

Economist Gabriel Felbermayr gives the Tyrolean double budget without new debt a good report card: "If the Tyrolean model were transferred to the other federal states, we would have a much smaller problem for the state as a whole." 

With Wifo head Professor Gabriel Felbermayr, Governor Anton Mattle was able to involve a proven expert in the budget preparation. The final result - no new debts in the next two years - is not only a source of great satisfaction for the head of the province, but also for the chief economist. "The surplus from operating activities and the surplus in the operating budget are two indications that we are on the right track," said the professor, assessing the figures. Now all that remains is to stick to the budget path: But this is what Tirol is known for.

Save and still invest
The improving economy may be helpful for budget implementation: while GDP growth in Tyrol this year amounted to 1.1 percent in the first half of the year, it was 0.1 percent on average across Austria - according to Felbermayr, this was due to pull-forward effects in the pharmaceutical and chemical industries.

Over the next two years, Tyrol has a total investment volume of more than 1.2 billion euros. In addition, the Tyrolean Municipal Investment Fund has 200 million euros available to municipalities in the form of low-interest loans.

LH Anton Mattle (left) and Gabriel Felbermayr, head of the economic research institute Wifo, provided insights into Tyrol's budgetary and economic development.(Bild: Land Tirol/Reiter)

"Not a budget to save money, but sustainable"
"It is a smart approach that the state of Tyrol wants to sustainably reduce the financing costs of the municipalities for investments and is also approaching the local banks. In times when the federal, state and local authorities have to make savings, necessary investments must not be forgotten. The balancing act of cutting back on systemic expenditure while still investing in the future is the right approach," praised the Wifo boss.

Nominally, there are no cuts in the budget. "Tyrol is setting a good example. With the Tyrolean model in other federal states, we would also have a much smaller problem for the state as a whole," said Felbermayr.

Tyrol is setting a good example. Overall, a credible plan is needed on how budget consolidation can succeed.

Wifo-Chef Gabriel Felbermayr

"Don't back down in the face of resistance"
"Clear signals that politicians are tackling what is necessary in an objective manner and are not backing down in the face of resistance and opposition could create a spirit of optimism in the state, which would support growth in the short term - the economy is also a mood," analyzed Felbermayr.

Politicians need the necessary courage and consistency to see an austerity course through to the end, emphasized Mattle, who will take over the chairmanship of the provincial governors' conference in 2026: "If you stop halfway, you won't be able to restructure a budget."

Necessary reforms must be considered from the perspective of the citizens, not from the perspective of interest groups.

LH Anton Mattle

Reforms, new taxes and the country's assets"
"Saving alone does not make a good economic policy. Austria must also tackle numerous incrustations," warned the economist: "Ambitious structural reforms are now essential to prevent more dynamic economies from pulling away and to preserve prosperity in Austria." LH Mattle expects these in 2026: "Where changes are necessary, the federal provinces must be at the forefront of change. That's why I want to turn the lip service paid by the reform partnership into concrete results."

Rejection of new taxes
Both rejected higher taxes. The financial difficulties should not lead to "ripping people off", said Felbermayr. An increase in property tax B is out of the question for Mattle: "That would make housing, which is already expensive, even more expensive."

Tyrol's assets significantly larger
With a debt level of 1.3 billion in Tyrol, a distinction must be made as to which assets this is offset by, explained Felbermayr. In the case of Tyrol, this amounts to 9.3 billion euros according to the asset budget.