First stage of the federal budget reform
This section provides an overview of the first stage of the federal budget reform which has been in effect since 1 January 2009.
The first stage of the federal budget reform, which has been in effect since 1 January 2009, is directed at the following objectives:
- Budget planning of the federal government is effected on a binding, multi-year basis. In 2009, a financial framework with binding expenditure ceilings was introduced for the first time. Those ceilings, which are broken down by five “headings”, are made binding on a rolling basis over four years in advance. The main portion of the expenditure ceilings is fixed as to amount. Variable ceilings are only provided for in the case of certain elements that either depend on the performance of the economy or on tax revenue levels. The amounts of those variable ceilings are determined by clearly defined parameters. In this way, the budget helps to stabilise the economy. The ceilings are set, and can be amended, by the Austrian parliament. Thus, the political process helps to maintain the necessary spending discipline but is simultaneously able at all times to react to changes in priorities. Accordingly, the Austrian parliament always retains the final say with respect to the budget.
- Multi-year budget planning increases certainty of planning for all parties involved, supporting predictable, sustainable budget policies. The strategy report prepared in tandem with the BFRG contains all of the information needed in order to comprehend the figures in the binding multi-year budget plan. That strategy report (in tandem with the BFRG) thus constitutes the central budgetary planning document.
- Since 2009, the government has likewise been creating incentives for the government departments to make it easier for them to handle tax revenues more frugally: funds not used by the end of a year do not expire, but rather can be added to reserves and used at a later time in line with departmental priorities and without being bound by previous appropriations. This makes every minister “his or her own minister of finance” and puts him or her in a position to increase the ministry’s leeway for action by managing budgetary funds in an intelligent and frugal way. Tax money is thus more efficiently utilised overall, which is in the best interests of all Austrians.