Governor Haslauer Sees All Federal States Challenged with Budget

The Governor of Salzburg, Wilfried Haslauer (ÖVP), reiterated that debts have increased significantly across all public authorities, but only 13 percent of this is attributable to the states and municipalities: "I therefore do not support a blame game at the expense of the states and municipalities." Nevertheless, all states should thoroughly review their budgets again and check all items such as subsidies and grants to curb the dynamics of expenditures. He did not want to highlight any specific measures.

Governor Haslauer does not rule out federalism reform

Haslauer can also envision a federalism reform. It is time to have a fundamental discussion, for example, about the distribution of responsibilities and financial accountability between the federal government, states, and municipalities, he explained: "I am very much in favor of this happening." He can also imagine more transparency from the states. That they regularly report figures and data on deficit development is "definitely an option that can be done." This would also improve forecast reliability. A problem, of course, is that the budget is created based on forecasts, and it often happens that these forecasts are incorrect.

Greens pleased with statements from Governor Haslauer

The Greens expressed their pleasure with Haslauer's statements. Salzburg's Governor has recognized "that the budget must be consolidated by everyone together, and that the states and municipalities - like all other public authorities - will have to contribute," budget spokesperson Jakob Schwarz was quoted in a press release. Schwarz also welcomed Haslauer's willingness for a federalism reform. "Here, the federal government and the states need to get moving - we have no time to lose."

Vorarlberg does not want to tighten its own savings target

Vorarlberg's Governor Markus Wallner (ÖVP) is maintaining the goal set for 2025 of saving 50 million euros in the state sector. When asked at a media event whether stricter savings were necessary given Austria's budget situation, he stated regarding the 50 million euros: "This is no walk in the park." It is clear that good coordination between the federal government and the states is necessary, but Wallner explicitly rejected a shift of burdens.

The governor referred to the intra-Austrian stability pact and also to the fact that these "rules of the game" are valid. However, it is also clear that one must focus on the respective areas with the greatest expenditure dynamics - at the federal level, these are pensions, and at the state level, health, education, care, and childcare. Regarding possible savings, "every area will be affected, that's clear," said Wallner. Standards will also be discussed. However, Wallner did not want to go into specific areas. "I will not engage in individual examples," said the governor.

The decision to save 50 million euros in Vorarlberg this year was made "autonomously and out of self-interest." Primarily, subsidies will be questioned, and in the state administration, only the most economical replacements will be made - around 200 retirements are expected in the next five years. In this regard, Wallner spoke of "homework" that all public bodies have to complete. On the other hand, everything must be done to stimulate the weak economy. "To this end, we are also keeping investments high," Wallner emphasized.

Budget: Institute for Federalism Sees Federal Government as Main Cause of National Debt

On Tuesday, the Institute for Federalism provided argumentative support to the states and municipalities, identifying the federal government as the main cause of national debt. According to them, it is by no means federalism that causes national debt to grow. In 2024, Austria's total debt ratio was 81.8 percent of GDP. Of this, 70.8 percent was attributed to the federal government. Thus, the pattern from 2023 remains: the debt burden is heavily concentrated on the federal government, while states and municipalities show comparatively stable values, according to the argument. The deficit is also largely determined by the federal government - the 4.7 percent of GDP last year was predominantly caused by the federal government (3.5 percent). The states (excluding Vienna) showed a small deficit of 0.4 percent of GDP, while the share of municipalities (excluding Vienna) was 0.2 percent. Vienna was responsible for a deficit of 0.3 percent, it was said. "The alarming state of public finances requires structural reforms," emphasized Institute Director Peter Bußjäger, highlighting the need for stronger financial self-responsibility of the states. Bußjäger once again advocated for the expansion of tax autonomy for the states. This would strengthen the sense of responsibility at the state level for expenditures and enable competitive federalism.

(APA/Red)

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