2023-09-08 12:47:00
Finance Minister Magnus Brunner (ÖVP) wants to bring new dynamics to the financial equalization negotiations and presented the states with a new proposal today. This provides for a future fund through which additional funds will flow in a targeted manner, according to the APA’s request. These should benefit the areas of childcare, housing and climate/environment. While the VP-led countries were positive, the red ones remained skeptical.
The principle is that there should be defined and measurable goals in the areas of childcare, housing, climate and environment in each federal state. If the states achieve this, there should be more money from the federal government. The finance minister sees this as a “completely new and innovative approach” to financial equalization. It’s not just about giving money from one local authority to another, but also about making Austria fit for the future together.
How states and municipalities achieve their goals is left to them. This allows for a high level of flexibility while achieving common goals. The government sees the areas of childcare, where Chancellor Karl Nehammer (ÖVP) recently announced an offensive, as priorities, as well as housing and climate and environment. The federal government had already promised additional funds for care a few months ago.
In the areas of health and care, Health Minister Johannes Rauch (Greens) sees the talks “on the right track”. Everyone involved has a common goal, everyone is ready to move. He believes the chance of an agreement is intact.
The federal government has recently improved its offering, especially in the area of care. More funds are now also earmarked for the expansion of specialist outpatient clinics, day clinics and similar outpatient facilities. In addition, the strengthening of the private practice sector should lead to relief for hospitals, which are primarily financed by the federal states. Of course, neither Brunner nor Rauch gave any details from the negotiations, which left it unclear how much additional money would flow.
Vorarlberg’s state governor and state representative Markus Wallner (ÖVP) now saw the negotiations as being on the right track. After the round of discussions on Friday, he spoke of a “step in the right direction”. After the announced federal funding of 4.5 billion euros for elementary education, Wallner “expressly” welcomed the future fund proposed by Brunner, through which additional funds should flow for states and municipalities.
“It is important to have common objectives in this fund – above all, these must be worked out together,” emphasized the state governor. State and local government spending rose sharply in elementary education, care and health, much more than at the federal level. The federal government must compensate for this development with more resources; after all, states and municipalities must not only continue to fulfill these tasks with high quality, but also further expand the offerings. We will continue intensive negotiations until the extraordinary state governors’ conference in Vienna on September 18th “and hopefully take another step forward there.”
Upper Austrian Governor Thomas Stelzer (ÖVP) said similarly: The federal government has “taken the first steps in the right direction”. The improved offer is “pleasant because for the first time it realistically reflects the challenges that the federal states are facing with care and health care.” But he is not yet satisfied: “The end of the line has not yet been reached and further negotiations are necessary.” The planned future fund “would be a completely new system, but I believe it has potential if the federal government, states and municipalities jointly set goals for important areas such as child care, climate protection or housing and work together to achieve them,” said Stelzer.
Vienna’s mayor Michael Ludwig (SPÖ), who is also part of the group of states, sees it as “fundamentally positive” that there is “finally movement” in the negotiations – but he can do relatively little with the federal government’s proposal, according to one sent to the APA opinion can be found. The most sensible option would still be to adjust the distribution key, as states and municipalities would increasingly provide more services, it said. Expenditures would develop significantly more dynamically than those of the federal government.
According to Ludwig’s office, the finance minister’s new offer includes around 1.3 billion euros per year in “fresh money” for states and municipalities. The Vienna share of this amounts to around 300 million euros. At the same time, in the period from 2024 to 2026, due to the tax measures taken by the federal government that were not coordinated with the states – such as the abolition of the so-called cold progression – the share of the state and municipalities’ shortfall in revenue would amount to around 13 billion euros.
As a result, Vienna would lose around 1 billion euros per year. It was emphasized that this roughly corresponds to the amount spent on public transport. It is now calculated that only 300 million euros would not even replace a third of the lost funds. It is also very important that the amount available as compensation for lost income due to the tax reform must be freely available: “The states and municipalities must have the opportunity to cover their running costs,” demanded Ludwig.
The chairman of the state governors’ conference, Carinthia’s governor Peter Kaiser (SPÖ), also remained skeptical, as he said he had “worry lines” as a result. The sum offered is far too little: “With the best will in the world, this is not possible. If the federal government sticks with it, then many current services, especially in health and nursing care, will be at risk.”
Association of Cities General Secretary Thomas Weninger called the federal government’s offer “too low”. It is clear to him that there must be further negotiations and adjustments. After all, he sees the future fund as a first step.
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