Blümel on Austria's 2020 Budget: More money will be provided No deficit anticipated this year – First EUR 4 bn package of initial emergency aid – Everything necessary will be done
"Exceptional situations require exceptional solutions. For this reason, entirely different criteria apply to this budget than to previous budgets. This is a crisis budget with an initial emergency aid package so that we can act swiftly and in a targeted and unbureaucratic fashion. The health of Austrian citizens, saving jobs and the stability of our nation are at the forefront! If more money is needed, more will be provided," declared Finance Minister Gernot Blümel on Austria's 2020 Budget.
Due to early dissolution of the Austrian National Council, no Federal Finance Act 2020 was passed into law in the autumn of 2019, which is why the federal budget is currently being implemented on the basis of the Provisional Budget Act and the 2018 Budget. This will be replaced by Federal Finance Act 2020 in order to ensure that the Ministry is able to take action and that its functional capabilities are assured.
At present, the outbreak and rapid spread of COVID-19 confront our society with an entirely new and immense challenge which must be collectively overcome. For the Austrian federal government, the welfare of the population is our first priority. The government is seeking to take all necessary measures in order to keep the social and economic effects of the crisis to a minimum. The outbreak of the COVID-19 pandemic is changing political, economic and social framework conditions, and is also impacting on the government's original budget-policy plans. In a first step, therefore, an initial emergency aid package has been incorporated as a result of an urgent revision to the 2020 Budget. Consequently, the previously-planned surplus for 2020 can no longer be achieved. As for how substantial the deficit will ultimately be, this cannot at present be predicted.
"The priorities are now entirely different from those of just a few weeks ago, when we commenced budget negotiations. For the situation is now completely different. For this reason, neither can we yet estimate how the figures will actually look at the end of the crisis. The only thing we can say for certain is that we will do what is necessary and help where we can."
That being said, the current Budget contains numerous measures which will now assist in overcoming the crisis. The Austrian Armed Forces and the police will be reinforced, and the areas of healthcare and social welfare services will receive more funding. In addition, the EUR 4 billion package from the federal government is anchored in the Budget in the form of a budget overrun authorization. As well as setting up the Corona Crisis Assistance Fund, plus offering extensive aid and support packages in a whole range of areas, in response to the corona crisis, the federal government is suspending tax and duty increases already scheduled in law. Furthermore, deferral of tax payments and a reduction in tax payments on account will be swiftly facilitated without undue bureaucracy.
The Austrian federal government is reacting swiftly and firmly to the outbreak of the coronavirus pandemic. For this reason, the Federal Finance Act 2020 includes authorization to endow an initial emergency aid fund to the tune of EUR 4.0 billion, with the aim of ensuring financing of initial measures to deal with COVID-19. As a result, the Draft Budgetary Plan currently shows a net financing requirement (administrative deficit) totalling EUR 600 million. The federal government will take all measures and assume all associated costs as part of the fight against the corona crisis.
"What matters now is not how individual statistics appear at the moment. The only thing that matters is that we should help people, workers and businesses in Austria as swiftly as possible. This Budget is a snapshot in time, and everything that follows will be decided over the further course and duration of the crisis," added Finance Minister Gernot Blümel with regard to the current Budget.
For indeed, the effects of coronavirus on production, the labour market, investment and consumer spending are currently difficult to forecast and impossible to calculate.
"We do not know how long the crisis will last. We do not know how significant the impact will be. We do know, however, that our utmost priority is to protect the population."