Minister announces:

The dual budget will soon bring us a new austerity package!

The budget poses numerous risks: Finance Minister Markus Marterbauer (SPÖ) sees no room for tax relief.(Bild: APA/GEORG HOCHMUTH)

The 2027/2028 double budget, which is currently being drafted, will bring Austria a new austerity package. An additional one to two billion euros must be saved, confirms Finance Minister Markus Marterbauer (SPÖ) in an interview with the “Krone.” The chances of tax relief are correspondingly slim.

TheFiscal Council had recently expressed doubts that the consolidation measures already implemented could reduce the budget deficit to below the three percent of GDP required by the EU in the medium term, and therefore presented a list of possible further steps that could lower the deficit.

According to the Fiscal Council, abolishing the family bonus, implementing further tax measures—such as changes to the sales tax—and making cuts to pensions would be particularly effective.

Fiscal Council Chairman Badelt regularly lectures the government(Bild: Eva Manhart)

Marterbauer optimistic
“We need to make further savings; there’s no question about that. I’m pleased with the Fiscal Council’s proposals. We also have long lists of measures at the Ministry of Finance that we could implement,” said the finance minister. He expressed confidence in achieving the goal of bringing the deficit below three percent of GDP.

According to Marterbauer, the additional savings required amount to between one and two billion euros, which is far less than what will be saved this year. “In 2026, we will save nine billion euros through spending cuts and tax increases. According to Fiscal Council President Christoph Badelt, we need up to two billion for 2028. The scale is quite different from 2025 and 2026.”

We need to make further savings; there’s no question about that.

Finanzminister Markus Marterbauer (SPÖ)

The war is a major source of uncertainty
“We are fundamentally on the right track. The economy is recovering. Inflation has dropped to just over two percent. Budget consolidation is on track. And now comes this unnecessary and foolish war, which of course could derail economic development across all of Europe. If it drags on, that is extremely dangerous. We appeal to all parties involved to end it immediately. But at the moment, no one can seriously say how long it will last and what the consequences will be. We’ll continue with our planning for now and then adapt flexibly to the challenges.”

The procurement of additional Eurofighters is also in jeopardy
On April 10, WIFO will publish its spring forecast. The Ministry of Finance traditionally bases its decisions on this. “But the uncertainty will be great and will remain so,” said Marterbauer. However, Marterbauer did not want to go into detail on specific consolidation proposals. That will be negotiated within the coalition. He does, however, clearly reject the Defense Ministry’s requests for several billion euros to replace the aging Eurofighters.

The Eurofighters must be replaced by new jets by 2032(Bild: Markus Zinner)

Marterbauer: “I see no room—even in the medium term—for additional purchases beyond what has already been agreed upon. Ten billion euros for a fighter jet procurement would simultaneously rule out any reduction in non-wage labor costs, which is also being called for. What was agreed upon in the Federal Finance Framework Act will hold, but I see no room for additional billions.””

No Apology to the State Governors
When asked about the recent friction between him and the state governors, Marterbauer responds with a dig. “We are on the best of terms. We did not negotiate the Stability Pact at the State Governors’ Conference, but where it belongs—at the Federal Ministry of Finance—and we were successful.”

There has recently been friction with the state governors(Bild: APA/ERWIN SCHERIAU)

Some state governors had recently expressed anger over Marterbauer’s remarks that the Governors’ Conference had been the “most bizarre evening of his tenure” and demanded an apology. Regarding the fact that he has been disinvited from the upcoming Governors’ Conference, the minister commented: “You can’t disinvite someone who wasn’t invited in the first place, and I don’t see what I’m supposed to apologize for.”

No financial impact expected from reform partnership
Regarding the reform partnership agreed upon between the federal government and the states, the finance minister does not expect any significant financial impact on the 2027–2028 budget. “Many reform projects may require initial investments and will only pay off within five years.”

Additional spending in the healthcare sector likely
In the healthcare sector, additional spending is to be expected anyway due to the aging population. “The majority of healthcare costs are incurred by those over 65. If there are more people over 65, it will cost more. That is why we must make the systems more efficient so that we can afford healthcare spending in the long term. I expect efficiency measures to be implemented that curb spending growth without compromising the quality of care.”