Budget Hearing: Statement on the 2027/28 Dual Budget

Vienna, 26 June 2026: During the budget hearing on the 2027/28 biennial budget, Mag. Ludwig Strohner, Head of the Public Finance Research Division, analyzed the planned consolidation measures and assessed them from an economic policy perspective. The key message: While the proposed measures will help ensure compliance with European fiscal targets in the short term, they are not sufficient to stabilize public finances in the long term.

The two-year budget calls for a net consolidation of 1.5 and 2.5 billion euros, respectively. At the same time, the debt-to-GDP ratio will rise to just under 84 percent by 2028. A significant portion of the consolidation will be achieved through additional revenue, which means that the tax-to-GDP ratio will remain high and the burden on employment, businesses, and the business climate will not be sustainably reduced.

The analysis shows that the current budget situation is primarily attributable to the sharp increase in public spending during the past crisis years. In particular, spending on pensions, health care, transportation, environmental protection, and education has contributed to the rise in the spending-to-GDP ratio.

Against the backdrop of demographic change, EcoAustria sees a significant need for reform. Model projections show that spending on pensions, health care, long-term care, and interest payments could rise by an additional 3.7 percent of GDP — or just under 20 billion euros per year — by the middle of the next decade. At the same time, Austria is already among the countries with the highest social spending within the European Union.

From EcoAustria's perspective, comprehensive structural reforms are therefore needed. These include, in particular, a stronger focus on efficiency in the public sector, a long-term reform of the pension system, the clarification of responsibilities within the federal system, and a consistent alignment of responsibilities for tasks, expenditures, and financing. Only in this way can the long-term fiscal space be created that Austria needs to enable growth, innovation, and investment in the future.