Budget negotiations

“As a bonus”: Neos wants to save an additional two billion

NEOS leader Beate Meinl-Reisinger is giving the finance minister a gift—or is she? (Photo montage)(Bild: Krone KREATIV/APA/HELMUT FOHRINGER, APA/MICHAEL GRUBER)

Budget negotiations are always tough, and with three governing parties, it’s even harder. Everyone has to give something up, and everyone has to get something. The leaders of the ÖVP, SPÖ, and NEOS have been negotiating for three days. An agreement is within reach, as the “Krone” has learned. But now the NEOS are stepping forward with a demand...

The central question is how the required savings of 2.5 billion euros will be achieved. There are two formulas that the three-party coalition is adhering to: two-thirds will come from the expenditure side and one-third from the revenue side. When allocated among the ministries, the ÖVP- and SPÖ-led departments are each expected to contribute 40 percent, and NEOS 20 percent.

NEOS Irks ÖVP and SPÖ
The NEOS are causing frustration among the ÖVP and SPÖ, with party leader Beate Meinl-Reisinger publicly accusing her coalition partners of lacking ambition. The NEOS are also exerting strong pressure to make pensioners contribute, even though this is a sore spot for both the SPÖ and the ÖVP—after all, seniors were already hit hard in the 2025–2026 austerity budget.

Meinl-Reisinger is causing a stir with statements made in the press lounge after the cabinet meeting.(Bild: APA/HELMUT FOHRINGER)

Since social spending accounts for a large portion of the budget, cuts will have to be made in this area. However, the public pressure that NEOS keeps building up is rubbing the governing partners the wrong way.

NEOS wants to save an additional two billion by 2028
In line with this, NEOS budget spokesperson Markus Hofer also makes a new push in an interview with “Krone”: By 2028, the federal government should save not just 2.5 billion, but over four billion euros. “The last austerity package was a must; now comes the optional part. We want to be more ambitious there,” says Hofer. The deficit path is to remain, but the additional 1.5 to 2 billion euros are intended to give policymakers some leeway. “The main focus would be on reducing non-wage labor costs,” said Hofer. How this will be financed remains a matter for negotiation. However, structural reforms will likely be unavoidable.

But friction isn’t limited to the Pink Party. The SPÖ is causing discontent among the ÖVP and NEOS with its ongoing debate on wealth and inheritance taxes.

Meanwhile, the ÖGB called for a significant increase in the bank levy. After all, financial institutions posted record profits for the fourth consecutive year in 2025, while their contribution to budget consolidation is now set to decline again in the 2027/2028 dual budget. The union wants the levy not only extended but also raised.

“Water tax” as a source of division
There is also a dispute between the state of Vorarlberg and the federal government. The issue is the planned lower electricity price for industry, which the energy sector is expected to help finance. A proposed “water tax”—a levy on hydroelectric power plants—is under discussion. The amount in question is 250 million euros. Hydropower producers are largely owned by the states. With a water tax, a portion of the profits would flow to the federal government. It remains to be seen whether the tax will be implemented. Criticism of the plan is already mounting. Vorarlberg’s Governor Wallner, of the ÖVP, even referred to it on “Ö1” as an attack on the finances of the west.

Despite the many frictions, an agreement on the central guidelines of the budget is within reach. The deal should be sealed by Friday at the latest. The Ministry of Finance plans to send the so-called “pie slices” to the ministries this week.