First Budget Consolidation Measures Initiated
Approved and thus forwarded to the plenary were an increase in the bank levy, a rent price freeze in certain areas, a statutory budget provisional, and further tax measures. The abolition of educational leave and the increase of the energy crisis contribution were not introduced.
Part of the Budget Consolidation Measures Act, which passed the Budget Committee by amendment with the votes of the three governing parties, includes the increase of the stability levy for domestic credit institutions (bank levy), the extension of the top tax rate of 55 percent for incomes over one million euros until 2029, the end of the VAT exemption for PV systems, the increase of the tobacco tax and its extension to alternative products, an increase of the betting fee from two to five percent, and the extension of the motor-related insurance tax to electric cars. In addition to the increase in the stability levy, domestic banks are to make a special payment this year and next, similar to what was done from 2017 to 2020. This special levy is expected to bring around 300 million euros per year into the budget.
The planned extension of the energy crisis contribution or a possible special levy for electricity producers is not included in the draft law, but could still be introduced by amendment at tomorrow's plenary session.
Green Light for Rent Price Freeze
A rent price cap for regulated rental agreements was also approved by a broad majority - this affects old buildings, municipal, and cooperative apartments. The changes to the Tenancy Law, the Benchmark Law, and the Non-Profit Housing Act are intended to suspend the increases due in early April 2025. In the Budget Committee, the government parties ÖVP, SPÖ, and NEOS, as well as the Greens, voted for the draft law. The next valorization is planned for April 1, 2026, whereby this must not exceed the inflation rate of 2025 according to the proposal.
In the budget committee, a statutory provisional budget was also decided, which is intended to replace the previously applicable automatic provisional budget. This is necessary due to the new distribution of responsibilities, which is also to be decided in the plenary session on Friday. Additionally, this ensures that state debts can continue to be incurred until a budget law is passed.
Claims of Ukrainians for Family Benefits Extended by Only Half a Year
The extension of claims for family allowance and childcare allowance for displaced persons from Ukraine was also decided by majority - but initially only until October 31 and not for a year as initially planned. This was justified by State Secretary Alexander Pröll (ÖVP) by stating that the foreign and security policy situation must be regularly assessed.
Also sent to the plenary for voting was an increase in the additional income limit for income-dependent child benefits. The previously valid limit is to be raised from 8,100 to 8,600 euros annually. A proposal by the Greens to amend the National Fund Act, which aims to change the election mode for the chairperson, was instead assigned to the constitutional committee.
A new Credit Servicer and Credit Purchaser Act (KKG) unanimously passed the budget committee, implementing a corresponding EU directive into national law and establishing further directive changes. The directive aims to reduce "non-performing loans" in Europe by establishing an efficient secondary market through a uniform legal framework.
(APA/Red)
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