Austria's budget speech leaked: 'Lowering taxes makes us happy'

Austria's government is confronting a severe fiscal crisis, characterized by a widening budget deficit despite having the third-highest state revenues among Eurozone countries. Finance Minister is set to unveil a "double budget" that includes an expenditure brake and a controversial pension reform, signaling a drastic shift in fiscal policy.

The minister highlighted the dire situation, noting that Austria is under an EU deficit procedure while countries like Denmark have consistently posted budget surpluses since 2016. "We are sitting on the Titanic at the Heuriger," stated Gerhard Steger, former head of the budget section at the Finance Ministry, warning of impending collapse if the course is not changed. The nation's debt interest payments are projected to skyrocket from 9.6 billion euros this year to 29 billion euros in 16 years.

The proposed "double budget" aims to address the crisis through five key measures. First, an "expenditure brake" will mandate that state spending does not exceed projected revenues, with departments forced to cut costs if they overspend. This mirrors successful models in Switzerland, Sweden, and Denmark. Second, the government will tackle the pension system's deficit, which currently requires 34 billion euros annually, by linking the retirement age to life expectancy. The minister argued that the current system is unsustainable and unfair to younger generations.

Third, all subsidies will be eliminated starting January 1, 2028. Austria is described as the "world champion in subsidies," with funds distributed to outdated industries and projects. The government argues that these cuts are necessary to modernize the state sector and protect citizens from excessive political spending. The full details of the remaining two points of the austerity package were not immediately available.

“

We are sitting on the Titanic at the Heuriger. If we don't change course soon, we will go under.