New Savings Package: An Overview of All Measures

In the coming years, a huge effort will be required from the federal government and the entire country to rehabilitate the dilapidated state budget. After the consolidation measures planned for this year amounting to 6.4 billion euros, even larger sums have been planned for the coming years. In total, 54 billion euros are to be found by 2029, either saved on expenditures or generated through additional revenues.

Next year, the government aims for a rehabilitation amount of 8.7 billion euros as announced, in 2027 it will be significantly more with 11.2 billion, 13.1 billion in 2028, and a full 14.6 billion euros in 2029. To have money available for offensive measures, the actual savings volume is even higher, amounting to about 7 billion this year, 10.3 billion euros in 2026, and according to the budget plan, 16.5 billion euros in 2029.

One third revenue, two thirds expenditure

About one third will be rehabilitated through the revenue side, two thirds through expenditure-side savings. Specifically, the largely already decided tax measures amount to 1 billion euros this year, and 2.2 billion euros next year. 550 million will come annually from increased contributions for banks and energy suppliers. 440 million will be generated from next year by the partial suspension of the abolition of cold progression. 270 million is expected from yet to be defined measures to combat tax fraud.

The subsequent valorization of federal fees, which will increase the costs for passports and the like by around 40 percent from July 1, will impact the budget with 65 million euros this year and 150 million on the revenue side next year. The expansion of the tobacco tax to alternative nicotine products is expected to bring in 85 million next year.

On the side of saved expenditures, the cancellation of the climate bonus is recorded, even though this measure was introduced as compensation for the CO2 tax. It brings around 2 billion euros annually. The second largest chunk is expected from cuts in subsidies: 1.3 billion euros this year, rising to 2.1 billion by 2029. Affected are mainly environmental subsidies, but also the investment premium and subsidies for the climate ticket, which is expected to become about 200 euros more expensive from next year.

7.7 billion savings in administration by 2029

Savings in administration are expected to bring 1.1 billion euros this year as announced, next year the departments must cut 1.3 billion, and in the following years, the contributions will continue to rise to 2 billion in 2029. In total, it amounts to 7.7 billion over five years. From next year, the decided labor market and pension measures are to take effect. In 2026, 1.4 billion is calculated, rising to 2.7 billion by 2029.

Further savings include the non-valorization of all income-independent social and family benefits for 2025 and 2026, such as family allowance, childcare allowance, various tax credits, as well as rehabilitation, sickness, reintegration, and retraining benefits. This is expected to bring around 200 million to the budget next year and 362 million by 2029.

State-affiliated companies like ÖBB and Asfinag must also contribute to budget rehabilitation. 600 million are budgeted for this year, 700 million for next year. The majority of this comes from increased dividend payments, but also adjustments in the ÖBB investment plans. These are expected to bring 154 million this year and 415 million next year.

The goal of the consolidation package is to exit the deficit procedure, which the EU Commission will soon initiate, by 2028, because the budget deficit will be pushed back below the allowed 3 percent threshold by then. However, the budgetary austerity is not yet over, as a seven-year path of budget consolidation has been chosen instead of saving even more within four years.

Subsidies are being significantly cut

The subsidy country Austria will be scaled back with the double budget 2025/2026. The aim is to reduce expenditures in this area by 1.3 million each. The environmental sector is particularly affected, but development cooperation, culture, and sports will also have to make sacrifices. Broadband subsidies and investment premiums are among the other budget "victims."

Of course, the reduction of subsidies with the double budget is not the end. On the contrary, the savings volume in 2029, the last year of the new financial framework, is expected to amount to 2.1 billion.

The Ministry of Finance explains the savings in subsidies with a strong increase in recent years. In 2019, the federal government's disbursements for subsidies amounted to 6.4 billion. This figure has roughly doubled by the previous year.

Already 557 million in savings are planned for environmental subsidies this year. Alone, 328.5 million will be withdrawn from the Climate Fund, which corresponds to a subsidy reduction by half. There will be 177 million less for the transformation of industry and energy efficiency. In addition to environmental subsidies as a separate item, measures for the climate ticket (abolition of the free ticket for 18-year-olds and price increase) are listed, which are expected to bring 120 million this year and 150 million from next year.

Decline in broadband subsidies and investment premiums

The subsidization of broadband funding is being significantly reduced. Here, 150 million will be cut this year. Just behind is the investment premium, where 130 million will be saved. Originally, 383 million were budgeted for it. From 2026, the instrument will no longer exist. There will be 110 million less for agriculture, forestry, and water management. For example, subsidies for comprehensive crop insurance will be reduced. Additionally, 20 million will be withheld from the Forest Fund, with half not being recorded as subsidies but as departmental savings.

After sports were recently treated well budget-wise, subsidies will now be reduced by 15 million. Ten million of the savings come from special sports funding and five million from general sports funding.

The situation is not much better for art and culture. Every year, five million in subsidies will be cut. This area also recently saw a massive increase in funds.

Furthermore, "budgetary adjustments" in subsidies for the protection of religious minorities are listed at the Federal Chancellery. Other ministries, such as the social and interior departments, generally promise a resizing of subsidies.

The consolidation strongly affects development cooperation and the foreign disaster fund. Ten million this year and 40 million next year will be cut.

Starting next year, it is hoped that the funding amounts will be significantly reduced again, namely through savings ideas from the established funding task force. For 2026, 150 million are already budgeted under this title. By 2029, they aim to generate 800 million by foregoing unnecessary subsidies.

Budget: Tax revenues flow less, tax rate rises

In light of the bleak economic situation, tax revenues are flowing less than expected. For gross taxes, an increase of 3.1 billion euros to 116 billion is expected in 2025 compared to the previous year. This is 2 billion less than estimated in the financial framework created in 2023. In the coming years, tax revenues are also expected to be lower than expected despite tax increases due to the weak economy. Nevertheless, the tax rate will rise to around 45.5 percent of GDP in 2026.

Due to the weak economy, corporate and income taxes will each decrease by about 0.1 percentage points of GDP in 2025. From the finance minister's perspective, the tax-free employee bonus also has a dampening effect. Nevertheless, revenues from income tax are increasing more than expected due to wage increases. In 2025, 1.1 billion more in income taxes will flow into the state budget than in the previous year, and thus 500 million euros more than according to tax estimates in the financial framework 2024-2027. However, revenues from value-added tax, capital gains tax, corporate tax, and mineral oil tax are flowing less than assumed.

Thanks to the tax measures already decided by the tripartite coalition, additional revenues will come from the bank levy, energy crisis contribution, and energy levy. The comparatively low asset-effective taxes will increase from 30 to more than 60 million euros in 2026 due to the increased taxation of foundations.

The overall tax and levy rate will grow from 44.5 to 45.3 percent of GDP this year and to 45.5 percent next year. By 2029, the tax rate is expected to slightly decrease to 45.4 percent according to the financial framework. The goal set by ÖVP and NEOS of a tax rate heading towards 40 percent remains far off for now.

The targeted reduction in non-wage labor costs from 2027 is currently not financially feasible according to Finance Minister Markus Marterbauer (SPÖ), unless counter-financing is found through further measures.

Major cost drivers are pensions and interest

State expenditures have massively spiraled out of control in the past year, as shown by the enormous expected budget deficit of 4.5 percent of GDP this year. The biggest cost driver is pensions, which account for more than a quarter of the total federal budget expenditures. Noticeable are also the rising interest expenses due to high national debt, which increasingly burden the budget.

The largest item in budget expenditures by far is pensions. 32.9 billion euros are budgeted for this in 2025, which is 2.8 billion more than the previous year. Next year, the federal subsidy for pensions will rise to 34.2 billion. The reason for the increase this year, besides demographic development, is that the adjustment factor of 4.6 percent, which compensates for the previous year's inflation, is significantly above the nominal growth of 2.2 percent.

Even in the coming year, pensions will remain by far the largest cost driver due to demographic developments. The government's measures change little in this regard. With the introduction of partial pensions, the employment package for older workers, and a more difficult access to corridor pensions, 633 million euros are expected to be saved next year, with the measures bringing slightly more in the following years: by 2029, the amount will rise to at least 1.9 billion euros.

Increasing financing costs are also becoming a growing burden on the budget. Due to high national debt, 8.4 billion euros must be paid this year alone for interest and other financial expenses. This is one billion more than the previous year and corresponds to 1.5 percent of the gross domestic product (GDP). Next year, financing costs will rise to 8.9 billion or 1.7 percent of GDP. The increase continues and reaches 9.9 billion euros or 2.4 percent of GDP by the end of the financial framework period in 2029.

Despite Savings Pressure, Investments Are Also Made

The fact that the government has to save so much is also due to the fact that offensive measures are being taken in certain areas. This year, 600 million are planned for this, and next year 1.6 billion. From 2027 to 2029, 1.8 billion are budgeted under this item each year. Among other things, investments are being made in the employment of older people, a second kindergarten year, and language promotion.

The significantly largest part overall falls on the area of economy and labor, where 476.5 million are planned this year alone. This is followed by the education sector with initially 120 million.

Next year, the government will allocate 300 million for making work in old age more attractive. A model is planned in which, firstly, the additional income of employees eligible for old-age pensions will be taxed at a final rate of 25 percent, and secondly, employees will be exempt from social security contributions. Employers only have to pay half the contribution to pension and health insurance, while the remaining ancillary wage costs remain the same. 40 million are reserved for extending the heavy labor pension to caregivers.

230 million this year and 100 million in 2026 are earmarked for a qualification offensive by the employment service. At least 150 million is expected to be the cost next year for the successor to educational leave, the training period.

While the climate ticket is becoming more expensive, the commuter euro for drivers will be tripled. This will cost 110 million euros next year. The measure is argued as compensation for the elimination of the climate bonus. Specifically, the tax deduction will amount to six euros per kilometer of the simple commuting distance between home and workplace starting in 2026. 20 million this year and 50 million in 2026 will be the cost of exemption from the standard consumption tax for motor vehicles primarily intended for goods transport.

The "Clean Austria" project will continue. 30 million will be used in 2026 for shifting freight transport to rail.

Tax-Free Employee Bonus

The government is allocating 165 million this year to enable a tax-free employee bonus. This should amount to up to 1,000 euros. Only 85 million are reserved for the coming year.

From the health sector comes the innovation fund to strengthen outpatient care, for which 50 million will be available next year. The VAT exemption for contraceptives and female hygiene products costs 28 million. A total of 86 million is available for relief on prescription fees. 35 million are allocated for the maintenance guarantee fund.

Over 55 million this year and 90 million next year can be expected by the Ministry of Education for language support and violence protection in schools. 20 million will be primarily used for the opportunity bonus, which goes to schools that are socially particularly challenged. The mandatory second kindergarten year demands 80 million from the budget. The project for free snacks in kindergarten is subsidized with 20 million.

Abolition of Educational Leave Dampens Labor Market Expenditures

The abolition of educational leave, including social security contributions, dampens labor market expenditures by 240 million euros this year and by 650 million euros next year. The government has budgeted around 10.3 billion euros for labor expenses in 2025, as stated in the budget report published on Tuesday. This corresponds to an increase of 164 million euros. On the revenue side, unemployment insurance contributions amounting to 9.7 billion euros are expected.

Next year, the ÖVP-SPÖ-NEOS government has listed disbursements of 10.34 billion euros and receipts of 10.45 billion euros in the budget subchapter 20 "Labor". This would even result in a small surplus.

Since the revenues and expenditures of unemployment insurance can rise and fall in the short term depending on labor market developments, the actual budget revenues and expenditures also change. In its last economic forecast in March, the Wifo expected a decline in the unemployment rate from 7.3 percent this year to 7.1 percent next year. However, if the economic downturn in 2025 is stronger than expected, then expenditures for unemployment benefits will rise, and the unemployment insurance contributions made by employees and employers could be lower than expected. Unemployment insurance is managed by the Public Employment Service (AMS).

Expenditures for active labor market policy (labor market promotion budget) are expected to decrease by 42 million euros to 1.427 billion euros this year and increase by 169 million euros to 1.597 billion euros next year, according to the budget report. The active labor market policy of the AMS primarily includes the promotion of vocational training and further education (including training), mobility, and temporarily subsidized employment in commercial enterprises or social companies. The restriction of unemployment benefits for marginally employed individuals is expected to bring savings of 110 million euros next year.

Since April 1, no new educational leave applications can be submitted. From the beginning of 2026, the government has a "targeted successor regulation" with the further education period. Approximately 150 million euros are earmarked for this in the federal budget.

Significant Cuts in Climate Funding

The government intends to make significant savings in environmental and climate funding to consolidate the budget, but also to charge the energy industry. Thus, the extension of the "energy crisis contributions" for electricity and fossil fuels is expected to bring around 200 million euros into the state treasury this year and next year. However, private individuals will also feel the reduction in funding for PV systems and the inclusion of electric cars in the vehicle tax.

Specifically, the energy crisis contribution for electricity (EKB-S), introduced at the end of 2022, has been extended until March 2030, and the energy crisis contribution for fossil fuels (EKB-F) until December 2029. Additionally, the investment deductions for the EKB-S and EKB-F are being adjusted. The expected annual revenues until then are estimated at 200 million euros. The expiration of the reduction in the energy levy - which is primarily paid by companies - is expected to bring in nearly one billion euros.

Savings in environmental subsidies are expected to contribute 557 million euros to budget consolidation this year, with savings reaching 819.9 million euros by 2026. Among other things, subsidies for the thermal renovation of houses and heating system replacements will be reduced, resulting in an additional 21.4 million euros remaining in the budget this year, with the consolidation contribution expected to be 244.0 million euros by 2026.

Climate and Energy Fund to be Halved

The largest portion of savings comes from cuts to the Climate and Energy Fund, with 328.5 million euros to be saved this year and 335.1 million euros next year by reducing the annual work program by 50 percent. An additional 177.1 million euros this year and 180.8 million euros in 2026 are to be saved through cuts to the Transformation of Industry subsidy programs and measures to increase energy efficiency.

There will also be fewer subsidies for the restructuring of the energy system in the area of photovoltaics. The originally planned VAT exemption for the purchase and installation of PV modules until the end of 2025 was prematurely ended on April 1, 2025. This measure will result in an additional 175 million euros in the budget this year.

Significant Additional Revenue from Gambling and Betting

As part of the savings package, the federal government will also impose higher levies on gambling and betting providers. Both gambling taxes and betting fees are set to increase, and a "modernization of the gambling monopoly" is expected to bring several million euros more into the budget.

For instance, the betting fee increased from two to five percent of the stake on April 1. This is expected to bring 50 million euros to the budget this year, and 100 million euros each year thereafter. In contrast, the gambling tax amounts to 16 percent. "Due to the similarity of betting and gambling under the Gambling Act, an alignment of the tax burden is to be achieved here," states the budget report.

Additionally, the gambling tax for lotteries is to be raised from 16 percent to 17.5 percent. The concession and gambling tax for electronic lotteries (online gambling) is to increase from 40 percent to 45 percent. The gambling tax for state-run games with gaming machines and for games with video lottery terminals is to rise from 10 percent to 11 percent, and the surcharge taxes of the states (amounting to 150 percent of the base tax) are consequently to increase from 15 percent to 16.5 percent. Furthermore, a gambling tax on the administrative cost contribution for lotteries at a rate of 7.5 percent is to be introduced. These measures are expected to result in additional revenue of 31 million euros in 2025 and 71 million euros in 2026. According to the budget report, this tax will then continue to rise slightly in subsequent years.

In Austria, there is a monopoly on gambling, both online and in casinos, which is difficult to enforce online. The gambling tax serves to "avoid incentives for excessive spending on gambling and to combat gambling addiction," with the revenue for the budget being "only a pleasant side effect, not the actual reason for the restrictive policy pursued."

Without further details, a "modernization of the gambling monopoly" is also announced, which is expected to bring in 10 million euros this year, and 20 million euros in the following two years. From this title, 90 million euros are budgeted for 2028 and around 100 million euros for 2029.

Reclassification from Farmland to Building Land Taxed at 30 Percent

The reclassification of arable and grassland into building land has so far been a very good business for landowners. The state is now taking a share of this. The future "reclassification surcharge" will be 30 percent and will be collected with the real estate income tax. This will apply to land sales from July 1, 2025, if the reclassification took place from January 1, 2025. This is expected to bring in 10 million euros to the budget this year and 30 million euros next year, with 50 million euros in the following years.

In administration, savings of 10 million euros in the area of agriculture and forestry are planned for this year and 6.8 million euros for next year. In the area of environment and climate, it is significantly more: 90 million euros this year and 106.4 million euros next year. In terms of reducing subsidies, agriculture and forestry are expected to contribute 110 million euros this year and 25 million euros next year. The forest fund will contribute 10 million euros this year and 0.5 million euros next year.

In the area of water management, for example, old cases should also be better addressed with water law emergency police measures. As of September of the previous year, the outstanding total claims here amounted to almost four million euros.

Within the ministry itself, Agriculture Minister Norbert Totschnig (ÖVP) also wants to save. A "sustainable capping of overtime, business trips, and events in 2025" is intended, with the basis for planning for 2025 being the year 2023.

Health: Increase in 2026

The federal health budgets for this year and the coming year are characterized by declining disbursements in 2025 (2.8 billion euros, minus 3.7 percent) but sharply increasing expenditures in 2026 (3.2 billion euros, plus 13.3 percent). This is primarily due to a new health reform fund from the pension insurance carriers, which reflects the increase in health insurance contributions for pensioners. The e-card service fee will rise from 13.80 to 25 euros.

Specifically, the year 2026 will bring additional disbursements of 376.5 million euros in the health sector. The new fund will contribute an additional 497.5 million euros, while at the same time, Covid-19 disbursements will be reduced by 115.3 million euros.

As stated in the budget report published by the government on Tuesday, the fund's money is to come annually from the pension insurance carriers starting in 2026. It is intended to improve care, reduce waiting times, promote digitalization in healthcare, and increase efficiency (which should help adhere to the cost containment path). The fund is to be legally anchored. Guidelines for the use of funds still need to be developed.

For the federal government, the higher health insurance rates for pensioners mean that it must make higher transfers to the pension insurance carriers. This situation results from the so-called levy rates, based on which the health insurance contribution of pensioners is increased. This effect is neutral for the overall state but worsens the balance for the federal sector, amounting to 257.7 million euros in 2025 and 497.5 million euros in 2026.

The social insurance institutions are set to gain significant additional revenue from the planned measures, primarily through the increase in the health insurance contribution for pensioners to 6.0 percent of the gross pension as of June 1, 2025 (0.6 billion euros additional revenue in 2025, 1.2 billion euros in 2026). Further funds will come from the increase in the e-card fee, including its extension to pensioners. Additionally, the replacement of sickness benefits for the unemployed and the costs for maternity benefits by the Public Employment Service (AMS) will result in additional income for the social insurance carriers.

The Ministry of Health and Social Affairs commits in the health chapter to contribute around 20 million euros this year and around 23 million euros next year to budget consolidation. Reduced spending on information activities and subsidies should contribute to this, as well as the "finalization of pilot projects in the area of health prevention for young people and adults." What exactly will be cut remains unspecified.

Additional Expenditures for Care

In the area of care, the inclusion of care professions in the heavy labor regulation (in the pension insurance chapter) will result in an impact of 40 million euros from 2026. 50 million euros are earmarked for the coming year for an innovation fund to strengthen outpatient care (such as the introduction of therapy and care practices).

The care fund will receive an additional 55 and 52 million euros, and it will be endowed with 1.4 billion euros in 2026. The care allowance will continue to be valorized, with payouts amounting to 3.24 and 3.32 billion euros in the two years. Overall, including support for people with disabilities, additional expenditures of 215.2 million euros (+4.2 percent) are planned for 2026 alone.

The Ministry of Social Affairs and Health defends the increase in health insurance contributions for pensioners from 5.1 to 6.0 percent. This helps to sustainably secure the financial stability of the healthcare system, it was stated in a press release. It was also emphasized in this release that this had already been reported to the EU Commission as a binding measure by the coalition negotiators of FPÖ and ÖVP. However, the SPÖ has achieved mitigations, so the increase for minimum pensioners and recipients of the compensatory allowance will be suspended for 2025.

At the same time, it was emphasized that for 2026, the prescription fee will be frozen at the 2025 value - 7.55 euros - and the previous prescription fee cap will be converted into a medication fee cap ("medication cost cap"). This means that medications costing less than the prescription fee will also be considered. Additionally, the threshold for exemption will gradually decrease from 2 to 1.5 percent of annual net income starting in 2027.

Solidarity Contribution from Research, Question Marks on Growth Path

In the federal government's double budget for the years 2025 and 2026, there are savings in the area of science and research, but no major disruptions: Research institutions are encouraged to save solidarity contributions - for example, by postponing construction projects. However, the Academy of Sciences (ÖAW) is concerned about the legally prescribed growth path in an initial reaction.

Overall, the Ministry of Science will distribute just under 7.3 billion euros this year and just over 7.3 billion euros in 2026, as the budget report shows. This corresponds to an increase of around 716 million compared to 2024. However, this additional amount mainly goes towards universities as part of their performance agreements, which are fixed for the years 2025 to 2027 and remain unaffected.

Next FTI Pact Open, Non-University with "Solidarity Contribution"

The financing of the central research funding agencies and non-university research institutions of the country also operates within a three-year budgetary framework. For the currently ongoing period 2024-2026, a total of around five billion euros is available in the so-called "FTI Pact." The current double budget shows an increase of 49.2 million euros to 885.1 million for the institutions considered in the FoFinaG from 2024 to 2025. The jump from this year to 2026 amounts to 8.1 million euros. The Research Financing Act (FoFinaG) essentially stipulates a "long-term, growth-oriented financing," which means that an increase for research institutions would need to be agreed upon for the period from 2027.

As a savings amount in the area of administration, the Ministry of Science's budget report indicates 40.5 million euros for the current year (2026: 47.9 million). The department will also manage this through a "solidarity contribution" from non-university research, as it is stated. "In difficult times," one does not shy away from the pressure to save, said ÖAW President Heinz Faßmann in a statement to the APA: "We can manage our contribution by partially postponing centrally planned new acquisitions and investments in infrastructure. It is clear that we will not save on research programs and the promotion of young talent."

From the current budget, nothing specific can be derived about the design of the next FTI pact. This was already announced by Science Minister Eva-Maria Holzleitner (SPÖ) in recent days. The focus of ÖAW and others is already on the financial framework from 2027 to 2029. According to the budget report, the expenditures of the science department during this period will each be slightly over 7.2 billion euros. Faßmann now expects "that the FTI pact for 2027 to 2029 will be renegotiated and repaired by next autumn." If the budget remains at the emerging level, this would be "completely unacceptable and would mean the end of a decades-long success story," thus "what is stated in the government program would already become obsolete," said the ÖAW chief in reference to the commitment in the government program to raise the research quota from the current 3.34 percent to four percent of the gross domestic product (GDP) by 2030.

In 2025 and 2026, the disbursements in the research sector, which flow from the Ministry of Economic Affairs into the sector, will remain roughly the same (2025: around 230 million euros, 2026: just under 220 million) - with the research funding agency (FFG), the Austria Wirtschaftsservice (aws), and the Christian Doppler Society (CDG) each receiving slightly less money in 2026 than in 2025. The research funds from the Ministry of Transport and Infrastructure behave similarly: They decrease slightly from 627.1 million this year to 625.1 million euros next year - with a slight decrease at the FFG and a small increase at the Austrian Institute of Technology (AIT) or the Silicon Austria Labs (SAL). The expenditures have been kept stable here, "because it is necessary to invest in future areas such as research, development, and innovation as well as key technologies (...)," it says.

Infrastructure Ministry Postpones Numerous ÖBB Projects

The Infrastructure Ministry is also making expected cuts. According to its own information, the department of Peter Hanke (SPÖ) is contributing around 640 million euros this year and around 830 million euros next year to budget consolidation. This is primarily to be achieved through the postponement of numerous ÖBB infrastructure projects and increased dividend payments from Asfinag. There are also savings in subsidies, the climate ticket, and administration.

Specifically, according to the ministry, savings of around 300 million euros from ÖBB project postponements are planned this year, with the remaining 340 million euros resulting from "optimizations in the subsidy area," lower expenses for the climate ticket, and savings in personnel and material expenses. Included in the 640 million euros is the material expense of 178.8 million euros shown in the budget report. Next year, the consolidation contribution will be around 830 million euros - 500 million euros from ÖBB project postponements, 330 million euros from subsidies, the climate ticket, and administration. The 830 million euros include the 211.3 million euros in material expenses mentioned in the budget report.

The double budget has been "very hard-fought in recent weeks," said Hanke in a press conference. He also sees himself "a bit as a location minister," doing what is necessary to get out of the difficult economic situation. When asked about the budget management of his predecessor Leonore Gewessler (Greens), Hanke replied: She "did it with a watering can, it quickly ran out. We do not want to go down this path."

"No projects under construction will be postponed," emphasized ÖBB chief Andreas Matthä to the media. For example, the Koralm Railway, the Semmering Base Tunnel, the Brenner Base Tunnel, and the S-Bahn Vienna junction are to remain on track. Projects whose "timeline" will be re-examined include, among others, the airport link, which better connects Vienna Airport to Burgenland and Bratislava, the Northern Railway expansion, and the electrification of the Krems-Herzogenburg railway line. According to Matthä, there will be "certainly no restrictions" in passenger transport. However, the timetables will be reviewed for their efficiency.

No cuts are planned in personnel and maintenance either: "We do not want German conditions," added Matthä. According to the ministry, 3.2 billion euros will flow annually into the expansion and maintenance of existing routes. Between 2025 and 2030, a total of around 20 billion will be invested in the revised ÖBB framework plan. This benefits the industry as well as the passengers, said Hanke. Asfinag is investing around 1.7 billion euros in 2025 in the renovation and expansion of the road network.

According to the report, expenditures will increase by 672.6 million euros (+12.6 percent) this year compared to the previous year, and by 562.4 million euros (+9.3 percent) in 2026 compared to 2025. "Substantial additional payments" are due, among other things, to ÖBB infrastructure projects and increased demand for the climate ticket.

At the same time, the belt is being tightened here: The abolition of the free climate ticket from the age of 18 and a price increase above the inflation rate are expected to bring savings of 120 million euros this year and another 150 million euros next year. Additional revenues in the mobility sector are also planned through the increasing CO2 toll and additional dividends from ÖBB and Asfinag.

Meanwhile, research, according to Hanke, has "hardly any savings" to fear with 620 million euros annually.

Criticism from NGOs on Climate Budget Cuts

Much criticism of the presented double budget on Tuesday has come from environmental and climate protection organizations. Greenpeace sees the important area "falling by the wayside," while climate-damaging subsidies remain untouched. "This is completely incomprehensible. Those who save on climate protection today will have to reckon with billions in penalty payments for missed climate targets tomorrow," said Jasmin Duregger, climate and energy expert at Greenpeace.

According to the NGO, the government must "reform climate-damaging subsidies in an environmentally friendly manner without hesitation" and "not continue to finance the fossil industry with a tight budget," which costs the state up to 5.7 billion euros per year. Greenpeace referred to a Wifo survey from 2022.

Harsh words also came from Global 2000: "The prioritization in this budget is completely wrong. Investments in climate protection measures are essential for survival and not a luxury. The retention of environmentally harmful, unjust subsidies in the billions is nothing less than a short-sighted kowtow to the fossil lobby," said Johannes Wahlmüller, climate and energy spokesperson for the environmental protection organization, in a statement. To become independent of fossil energy from autocratic regimes, Austria must invest more in renewable energies and social climate protection.

Criticism of the Lack of Reduction in Environmentally Harmful Subsidies

The WWF misses structural reforms in the budget and criticizes the massive cuts in climate and environmental protection. Especially nature conservation needs stronger funding. "The planned double budget contains several wrong signals and is overall a missed opportunity," said WWF program director Hanna Simons. "The federal government is putting off the reduction of environmentally harmful subsidies, but is massively cutting climate protection and investing far too little in biodiversity protection." However, a step in the right direction is the planned reallocation levy, whose revenues should be earmarked for soil protection and renaturation measures.

In addition, the WWF wants a rapid presentation of a reform and reduction plan for all environmentally harmful subsidies. The tripling of the commuter euro and the abolition of the standard consumption tax (NoVA) for small trucks with combustion engines are viewed critically, especially since the climate ticket is being made more expensive at the same time. "The lack of reform willingness burdens the budget and makes it difficult to achieve the climate and environmental goals of the republic. This threatens massive additional costs, which would be far better invested as future provisions in Austria," says WWF climate spokesperson Reinhard Uhrig.

From a climate policy perspective, the head of "Kontext - Institute for Climate Issues," Katharina Rogenhofer, sees counterproductive measures in the new double budget. "They burden climate-friendly behavior and favor climate-damaging behavior. PV systems, repairs, electric cars, thermal-energy building renovation, boiler replacement, and industrial transformation are becoming more expensive, while commuting by car and the use of fossil small transporters are becoming cheaper."

Although savings are essential due to the budgetary situation, a third of the total savings burden would fall on the climate sector if the abolition of the climate bonus is taken into account, according to Rogenhofer. "Especially in the climate sector, the eagerness to save could prove to be a boomerang for budget consolidation. Because with the penalty payments that arise if Austria does not meet the EU climate targets, a billion-euro Damocles sword hangs over the budget."

"Kontext" sees opportunities to combine budget consolidation with emission reduction. "By reforming the three largest climate-damaging subsidies in the transport sector alone, twice as much tax money could be saved in 2025 (1.1 billion euros with a tripled commuter euro) as through the proposed cuts in environmental funding (557 million euros)," it said in the statement. The announced mix of subsidies and regulations, such as phasing out oil and gas heating in existing buildings, is positively evaluated. However, the government has only provided a vague zero-emissions target in its program, without specifying a clear end date for the phase-out and without explicitly mentioning oil heating.

With a small protest action, activists from "Fridays For Future" protested during the budget speech in front of the Burgtheater. The group demands the "long overdue tax gifts to the fossil industry to be abolished" and launched a petition with an appeal to Finance Minister Markus Marterbauer (SPÖ). "Currently, we are spending money on fossil subsidies that we do not have - to promote emissions and thus climate damage, to which penalty payments will be added later due to missed climate targets. We are paying twice. If the loss of prosperity associated with environmental destruction and heating is taken into account, even three times," said Sofia Scherer from "Fridays For Future."

In times of a budget crisis, the "privilege for oil pipelines" cannot be maintained. The spokesperson for the movement, Laila Kriechbaum, considers this not only a reckless decision "from the past," but also called the decision "mockery."

The mobility organization VCÖ sees setbacks for climate-friendly mobility in the new budget instead of urgently needed progress. The cuts in public transport, cycling infrastructure, and e-mobility are counterproductive, especially with the tripling of the commuter allowance as a counterbalance. "While the climate ticket is massively increased in price, climate-damaging subsidies, such as the tax advantage for diesel, remain in place," said the VCÖ.

"To solve the existing traffic problems and achieve climate goals, a higher share of climate-friendly mobility with public transport and bicycles is needed, a faster energy transition in the vehicle sector from diesel and gasoline to electromobility, and a stronger shift of goods to rail. However, this can only succeed if, firstly, the supply of climate-friendly mobility is improved, secondly, climate-damaging subsidies are reduced, and thirdly, incentives for the use of climate-friendly mobility are set," said VCÖ expert Michael Schwendinger.

Military Development Plan Financially Secured

The "Development Plan 2032+" of the Austrian Armed Forces (ÖBH) is secured in the double budget presented by Finance Minister Markus Marterbauer (SPÖ) on Tuesday. Compared to 2024, the army's budget will increase by 349.1 million (plus 8.6 percent) in 2025. The following year, there will be another increase of 369.8 million, which means an increase of 8.4 percent compared to this year. The army must save on administrative expenses.

The Ministry of Defense has committed to contributing 70 million this year and 91.8 million in 2026 to consolidation. This is to be achieved through a reduction in overtime, reduction of special services, streamlining of business trips and work services, especially in the areas of marketing and advertising. There will also be cuts in the event sector. If possible, assistance services should also be reduced.

For armament investments to implement the "Development Plan 2032+" and investments in structural infrastructure, a total of 1.377 billion is planned, which means an increase of 119.6 million compared to 2024. In 2026, the investment sum will rise by 357.3 million to a total of 1.735 billion.

In the personnel category, an additional expenditure of 122.4 million is planned for this year. Next year, the costs will then decrease from this year's level by 41 million to 1.695 billion, resulting from budgetary provisions for salary increases and back payments due to the pre-service time reform. The latter are also decisive for the decline in personnel payments in 2026 compared to 2025.

There are also increases in operational expenses, mainly due to maintenance, ammunition procurement, and in 2026, an additional demand in the area of military facilities. In 2025, expenses in this area will increase by 130.4 million to 1.236 billion, and the following year by another 53.0 million.

Revenues will decrease by 8.2 million euros compared to this year to 50 million, and will remain at this level in 2026. The deviation is mainly due to higher revenues from sales and utilization proceeds as well as rental income in the preliminary success of 2024.

The federal financial framework foresees an increase in the budget to over one percent of GDP in 2027, while in 2026 it is still slightly below (0.94 percent of GDP). Even in 2028 and 2029, defense spending will remain slightly below one percent of GDP. Nevertheless, the goal set in the development plan of two percent of GDP will continue to be pursued, taking into account overall economic development, budgetary conditions, and European regulations, it is stated.

In addition, annual exceedance authorizations of 200 million for investments and 150 million (2026: 200 million) for the European Peace Facility (EPF) are planned. Taking these authorizations into account, the payout ceiling is 4.7 billion in 2025 and 5.2 billion in 2026.

If, in addition to the authorizations, the expenditure for the Federal Army pensions is also included, which is common internationally, the GDP share is different. According to calculations by the department, this results in 1.17 percent this year (based on GDP 2023) and 1.25 percent in 2026 (based on GDP 2024).

Higher Court Fees and Construction Postponements in Justice

In the justice sector, the budget plans for both higher revenues through the (already implemented) increase in court fees and lower expenditures through the postponement of construction projects that have not yet started. Savings are also budgeted for training and in the IT sector. Overall, around 50 million euros are to be contributed to consolidation this year and around 75 million euros in 2026.

As of April, court fees were increased by 23 percent - this affects, for example, amicable divorces, registration and filing fees in commercial register matters, fees for land register extracts, or fees for commercial register inquiries. Together with an expected increase in revenues from land register fees due to the recovery of the real estate market, additional revenues of 100 million euros are budgeted for this year and another 100 million euros in 2026.

Savings will be made in 2025 and 2026 on construction projects. Ongoing projects are exempt from this. The switch to open-source products in justice IT is also expected to bring up to ten million euros. Savings on training and seminars are planned by holding more video conferences instead of business trips and using judicial premises instead of external venues.

Additional positions for judges, recently demanded by staff representatives, are unlikely to be created. Their number remains the same according to the budget estimate, as does the number of prosecutors.

From 2026, an additional ten million euros are to be saved by having foreign prison inmates serve their sentences in their home countries. However, appropriate agreements must be signed for this beforehand.

No savings are planned for the planned expansion of violence clinics. There is also a commitment to the creation of an independent and instruction-free federal prosecutor's office, and conditional releases and the use of electronic ankle bracelets are to be promoted.

"The balancing act has succeeded: The judiciary is making its contribution to budget consolidation and remains on a solid foundation," said Justice Minister Anna Sporrer (SPÖ) in a statement. We use the available resources where they are most urgently needed.

(APA/Red)

This article has been automatically translated, read the original article here.