Initial Budget Details

Non-wage labor costs to drop by billions starting in 2028

On Monday afternoon, Babler, Stocker, and Meinl-Reisinger finalized the last details of the budget among themselves.(Bild: APA/HELMUT FOHRINGER)

Pink fouls, red astonishment, and black numbers: After days of wrangling, an agreement between the parties is imminent. The parties plan to address the media around 9 p.m. One thing is certain: Non-wage labor costs are to be reduced by over two billion euros in 2028, which is intended to boost the economy.

They argued, played hardball, snubbed each other with uncoordinated media appearances—and in the end, they still managed to come together. After numerous rounds of negotiations, marked by a “truly poor atmosphere,” a breakthrough in the talks is emerging on Monday.

The three party leaders—Chancellor Christian Stocker (ÖVP), Vice-Chancellor Andreas Babler (SPÖ), and Foreign Minister Beate Meinl-Reisinger (Neos)—have initially agreed on a two-year fiscal plan that calls for savings of 2.5 billion euros by 2028.

Breakthrough on reducing non-wage labor costs
As is well known, the savings are to be made within the ministries themselves. However, the federal government also hopes to generate revenue by extending the bank levy, which the SPÖ in particular had insisted on. In return, the SPÖ relented on the reduction of non-wage labor costs, which had been demanded primarily by the ÖVP and NEOS. The costs for businesses are to be reduced by two billion euros by 2028; this will be achieved through the Family Burden Equalization Fund, which will be partially funded from the budget in the future.

On Monday afternoon, Babler, Stocker, and Meinl-Reisinger finalized the last details of the budget among themselves.(Bild: APA/HELMUT FOHRINGER)

The emergency aid for companies is also to be offset by a partially lower inflation adjustment for pensions over the next two years. According to information from “Krone,” the corporate tax on corporate profits could also be raised for large companies above a certain threshold.

Until SPÖ Finance Minister Markus Marterbauer’s budget speech in Parliament, scheduled for June 10, the individual ministries still have time to negotiate the final details with Marterbauer. A final round of talks among party leaders will take place at 8 p.m., and the agreement is expected to be presented around 9 p.m.