Automatic Budget Provisional Comes Into Force From 2025

According to the constitution, it is the duty of the federal government to submit a budget proposal for the coming year to the National Council no later than ten weeks before the end of the year. Due to the National Council elections and the ongoing coalition negotiations, this has not yet happened, which means that an automatic provisional budget will be put into effect on January 1st.

Automatic Provisional Budget Limited by Debt Ceiling

An automatic provisional budget is a contingency plan provided for in the constitution to ensure the continued functioning of the administration and to prevent the state from becoming insolvent. In this case, the budget of the previous year is continued by applying the legal upper limits of the last federal finance law. However, there is a restriction that the federal government can only take on new financial debts up to half of the maximum amounts approved for 2024. This debt ceiling effectively limits the duration of the automatic provisional budget. According to the Budget Service of the Parliament, this limit is usually fully exhausted before mid-year. The maximum amount relevant for 2025 is therefore derived from the financial debt intake estimated at 114.4 billion euros in 2024.

The automatic provisional budget effective from January 1st can be overridden at any time by a statutory provisional budget or a new Federal Finance Act. Since it may take several months for the future government to present a new budget, the National Council could temporarily decide on a statutory provisional budget to guarantee more flexibility. The provisional budget can be introduced either by the members of parliament (by initiative) or as a government proposal.

Automatic Provisional Budget Already in Force in 2020

After the last National Council election in 2019, an automatic provisional budget also came into effect on January 1, 2020. Three days after the swearing-in of the turquoise-green government, a statutory provisional budget was passed in the National Council. This was also necessary due to the simultaneously decided new department distribution, so that budget funds could be allocated to the new ministries. With the statutory provisional budget, the debt ceiling is also lifted. Often, after delays in election years, the new government presents the budget in the spring in the form of a double budget - for the current and the coming year. In 2020, however, it was decided against this, and the budget preparation was then made extremely difficult by the massive effects of the Corona pandemic.

(APA/Red)

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