2023-11-17 23:47:37
More independence from American rating agencies through approval of the rating agency Scope
Vienna (PK) – At the end of the budget discussions for the Budget 2024 led the members of the Budget Committee There was a wide-ranging debate with Finance Minister Magnus Brunner on the eight budget subdivisions (UG 15, 16, 23, 44, 45, 46, 51, 58) of the finance department. The focus was on compliance with fiscal rules, which led to critical questions, particularly from the opposition.
Kai Jan Krainer (SPÖ), for example, insisted on compliance with the 2012 Austrian Stability Pact. Brunner countered this by saying that the EU fiscal rules would be redesigned. Sanctions are only threatened if the result does not meet the requirements. Brunner therefore wanted to wait to see how the EU law requirements would be developed. He assumes that the fiscal rules will be complied with at the European level in 2024. The negative primary balance will improve over the next few years; This will be received positively by the rating agencies, Brunner confirmed to Gerhard Kaniak (FPÖ). The Ministry of Finance expects an increase from -2.6% of GDP in 2022 to -0.7% in 2027. Elisabeth Götze (Greens) drew attention to the Maastricht limit (3.0% of GDP). For 2023, the target value will be set at -2.7% in accordance with the current BMF forecast. While the federal budget has a deficit, states and municipalities are doing better.
Andreas Hanger (ÖVP) stated that an expansionary fiscal policy was necessary to overcome the crisis. He advocated becoming more independent of rating agencies. So far, only data from agencies in the USA has been used. Brunner emphasized that Scope has now become the first European rating agency to receive approval from the ECB.
Since its introduction, the quality of the impact targets has continually increased, said Helmut Berger, head of the budget service, in response to a question from Karin Doppelbauer (NEOS). The ongoing criticism from MPs has led to improvements. During implementation, however, Berger recognized potential.
Financial administration: MPs question satisfaction, broadband expansion and AI strategy
In the financial administration, payouts are expected to increase by €298.6 million. This is primarily attributed to the broadband expansion (+€171.4 million) as well as higher personnel costs (+€92.2 million) and operating expenses (+€19.6 million). In total, payouts of €2.021 billion are planned. The deposits are expected to be €322.7 million. The federal financial framework for 2024 to 2027 was also negotiated (2179 and To 2179 dB).
The personnel plan includes 12,385 positions for 2024. The number of permanent positions should therefore increase by 136. The additional positions largely relate to the tax and customs administration (+80) and the central management (+36). “The administration is inflating itself like a puffer fish,” said Gerald Loacker (NEOS) critically.
Hubert Fuchs (FPÖ) discussed customer satisfaction with the quality of financial administration. The responsible section head explained that the Ministry of Finance has switched to making appointments. The Ministry of Finance sees this as an advantage for both sides. It was said that the system was being “increasingly better accepted” by customers.
Fuchs learned that €39.6 million in payouts are budgeted for the Federal Finance Court. According to an analysis by the Budget Service, the number of positions for the Federal Finance Court should remain unchanged at 282 compared to the BVA 2023. The Federal Finance Court (BFG) decides on complaints in tax and aid matters, in customs and financial criminal matters as well as in matters relating to Vienna’s state and municipal taxes and administrative tax violations relating to these taxes.
Karin Doppelbauer (NEOS) discussed broadband expansion. A study by WIFO advises once morest adding additional funds to the budget and making a further distribution before the end of 2024, she emphasized. The Ministry of Finance promised Loacker an update of the AI strategy for the second quarter of 2024. An AI service point will be located at RTR (Rundfunk und Telekom Regels-GmbH) and is intended to enable transparency, legal certainty and competence building. Two to three positions are initially planned, Loacker learned. The customs corridor in Carinthia must first be accepted by business and ÖBB, Brunner told Maximilian Lindner (FPÖ). Customs is ready, Brunner emphasized, and the BMF “has done its job.”
Global minimum taxation
The finance minister expects higher revenue from public taxes. Specifically, gross public taxes are estimated at €115.6 billion, €6.5 billion higher than in the previous year. Sales tax (+€3.1 billion), wage tax (+€1.8 billion) and income tax (+€1.5 billion) are expected to contribute to the increase. However, the revenue from corporation tax (-€1.0 billion) and real estate transfer tax (-€0.7 billion) is estimated to be significantly lower, Brunner told Schwarz. The budget service stated in its analysis that payments of €1.3 billion are estimated for national CO2 pricing. The CO2 pricing revenue is associated with great uncertainty, Brunner told Schwarz. In addition, EU emissions trading will be reformed (EU ETS 2). Payments from energy taxes are planned at €1.1 billion for 2024. From 2025 they should be at €800 million, Brunner told Doppelbauer.
Loacker said that the wage tax is expected to grow by an average of 4.3% per year from 2024 to 2027 despite the tariff reduction and tariff indexation being taken into account. This is a consequence of the expected high nominal wage increases, the increase in employment and the real progression due to real wage increases, analyzed Brunner.
The key question for Christoph Matznetter (SPÖ) was the high level of debt. He emphasized that he sees “no way out”. He was irritated by the expected development of income tax. The revenue from assessed income tax is budgeted at €5.0 billion. Compared to the 2023 estimate, a significant increase of €1.5 billion is expected. Brunner campaigned for fair taxation for international corporations and held out the prospect of dealing with the global minimum tax in the next finance committee.
Payments of €100 million are expected in the budget for the energy crisis contribution. These include payments from both the energy crisis contribution for electricity (EKB-S) and the energy crisis contribution for fossil fuels (EKB-F). In 2023, the EKB-S and EKB-F will generate unestimated deposits of approximately €250 million, of which approximately €170 million will go to the EKB-S, Brunner explained. This means that the total expected payment of €350 million from the energy crisis contribution falls short of expectations despite the tightening measures made, Brunner confirmed to SPÖ MPs Kai Jan Krainer and Christoph Matznetter.
The revenue from the mineral oil tax is estimated to be the same for 2024 as for 2023. Since the mineral oil tax is a quantity tax, the tax burden decreases over time, Brunner explained to the SPÖ and the Greens.
Civil servants retire at the age of 62.8
When it comes to civil servant pensions, the government expects an increase in spending compared to the 2023 estimate by €1.27 billion or 11.05% to €12.81 billion, with retired civil servants from the sovereign administration also those from outsourced legal entities, the ÖBB and the Post and state teachers – including care allowance benefits for these groups of people – are included in this budget breakdown. This compares to revenues of €2.15 billion (+4.04%). The average retirement age for civil servants was 62.8 years in 2022, which is slightly higher than in the statutory pension insurance sector.
According to the federal financial framework (2179 d.B.) will rise continuously to €35.23 billion, of which €20.7 billion falls into the area of statutory pension insurance and €14.54 billion falls into the area of civil service pensions. That is a total of 50.58% more than in 2022 (€23.4 billion). Brunner explained to Romana Deckenbacher (ÖVP) that deposits are generally showing a downward trend due to the declining number of active civil servants and the associated decline in pension contributions. In 2024, this trend will be interrupted as a result of the higher expected salary adjustment due to high inflation, according to the Budget Service analysis. The actual retirement age of civil servants is 62.8 years. While contract workers retire at the age of 60, civil servants can only retire at the age of 65, Loacker drew attention to the inequality.
Financial equalization: Brunner wants to complete negotiations on goals by next week
From 2024 onwards, a newly created future fund will provide states and municipalities with funds for the areas of childcare, elementary education, housing and renovation, as well as the environment and climate. This should amount to €1.1 billion in 2024, Brunner told Doppelbauer. There will be no renegotiation regarding the amount of financial compensation, Brunner told Lindner. Because all partners, including the association of cities and association of municipalities, had agreed on the sum in writing. The goals of the future fund are being negotiated, particularly in the health sector. The money is distributed to the municipalities via the states. Some federal states have already reached agreements, said Brunner regarding the SPÖ.
The financial equalization must first be completed. So far only the sum has been negotiated, Brunner emphasized several times. Discussions on goals and reforms in the health sector are ongoing. Brunner hoped for an agreement soon. This might be brought to the Council of Ministers as early as Wednesday and then dealt with by the National Council in the last plenary session of this year – in December. The municipalities should receive a special advance of €300 million in 2024 through their share of income, Brunner noted.
The payouts are estimated at €3.694 billion for 2024. Compared to the BVA 2023, the payouts increase by €1.691 billion. The budget service noted in its analysis that the increase in payments of €1.691 billion resulted largely from the fundamental agreement on financial equalization. In particular, the newly created future fund is budgeted at €1.1 billion.
The SPÖ and the Greens also asked whether Österreichische Beteiligungs AG (ÖBAG) is planning to invest in the Styrian circuit board manufacturer AT&S. According to Brunner, there are many open questions regarding this. He confirmed that initial discussions were being held. For 2024, ÖBAG has a budget of over one billion euros available for such cases, Brunner confirmed to MP Nina Tomaselli (Greens), who said she attached importance to political control in parliament. The SPÖ recognized a massive need for non-profit housing and the housing investment bank was approached. A revival is currently not being planned, said Brunner, with a view to the goals in financial equalization.
COFAG can pay out financial aid until October 31, 2024
In the federal assets breakdown, €2.635 billion in disbursements are planned. Compared to 2023, this means a reduction of 52% for 2024. The budget service noted in its analysis that the decrease resulted from the lower estimate of the electricity cost subsidy (-€2,160.1 million) and from the payments for the COVID-19 Financing Agency of the Federal GmbH (-€495.0 million). Furthermore, the increase in the European Stability Mechanism (ESM; -€146.0 million) will no longer apply. Liabilities under the Export Promotion Act (AusfFG) also decline (-€59.7 million). ÖBAG’s dividend is budgeted at €690 million, an increase of €120 million compared to the BVA 2023. Verbund AG’s dividend is estimated at €432 million, Brunner explained for Krainer.
COFAG was at the center of the MPs’ interest. The Constitutional Court has repealed several provisions of the Federal Law on the Establishment of a Federal Mining Company (ABBAG Law) as unconstitutional. The unconstitutional provisions will expire on October 31, 2024. Until then, COFAG can continue to carry out the tasks assigned to it by the ABBAG Act and therefore also pay out financial aid, Brunner told MPs Schwarz and Doppelbauer.
Federal Treasury: Direct access to federal securities
The deposits from the cash management (subdivision 51) are deposits from interest for the assessment of the federal government’s cash resources as well as deposits from transfers from the EU. The deposits in the draft budget for 2024 are estimated at €3.359 billion. This means they increase by €888.2 million compared to the previous year. The higher deposits are attributed to interest income and transfers from the EU arising from the Recovery and Resilience Facility (RRF). The Ministry of Finance cites the challenge as balancing the interests of flexibility through high reserves and lower credit risk with lower liquidity.
With interest rates now positive, deposits arise from the assessment of federal cash resources, which are estimated at €271.6 million in the BVA-E 2024, €147.9 million higher than in the BVA 2023. However, the majority of the deposits relate to transfers from the EU. These are estimated at a total of €3.088 billion in the BVA-E 2024.
According to Brunner, there will also be greater competition for savings in the future through the reintroduction of direct purchases of federal treasures. Until 2020, bonds might be purchased directly from the Republic, without any account management, transaction or brokerage costs. Brunner hopes that this will motivate banks to pass on the savings interest to their customers. The European Central Bank’s interest rate policy aims to control the economy, he emphasized to Nina Tomaselli (Greens)
Financing: Excess authorization and Swiss franc loans
The disbursements for financing are estimated at €9.153 billion in the 2024 budget draft. According to the Budget Service, this means an increase of €0.47 billion (+5.5%) for 2024. The NEOS also drew attention to an excess authorization amounting to €45.6 billion. The Ministry of Finance said that this would probably not be used. Krainer also discussed existing Swiss franc loans. The SPÖ MP emphasized that the Court of Auditors had suggested reducing the Swiss franc loans. According to Brunner, the portfolio is constantly being reduced in accordance with the recommendations of the Court of Auditors.
Petra Bayr (SPÖ) questioned a possible debt relief for Sudan. The Ministry of Finance said there were currently no signs. She was also interested in phase-out periods for public export credits from fossil fuel projects. A plan is being negotiated and a first draft has already been sent, confirmed Brunner. (Final Budget Committee) gla
NOTES: The Parliamentary Budget Service offers economic analyzes of budget policy and templates from the Federal Ministry of Finance.
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