The federal government is now responding to the demands of the federal states for more money in fiscal equalization with figures. Accordingly, it was the federal government that earned less revenue during the past period and had to spend far more than the other regional authorities. Finance Minister Magnus Brunner (ÖVP) now wants a stronger task orientation and a more efficient use of funds.
The fact is that the federal government bore the brunt by far – even beyond the competences of the federal government and the agreed distribution key, writes Brunner in a statement. According to figures from his department, there has been a 14.2 percent increase in federal income since 2016. This was behind the federal states with plus 15.6 percent and the municipalities with plus 22.8 percent. The increase in expenditure is indicated at 16.8 percent in the state sector and at 22.5 percent in the municipalities, while at the federal level it is 28.6 percent.
Of course, this is closely related to the expenses for fighting the pandemic, but also to other grants. About 450 million in housing and heating cost subsidies to the federal states are listed. The biggest chunk is the good two billion for the communities, which was distributed during the Corona peak phase. In addition, there are investment grants to the federal states and a compensation payment of 750 million for the hospitals.
Furthermore, the finance department argues that in 2021 the revenue shares of the municipalities were increased by 675 million at the expense of the federal government. The relief for low-income earners in the area of income tax resolved with the Tax Reform Act 2020 and the additional relief for low-income earners agreed as part of the eco-social tax reform plus the increase in the social security bonus and the pension tax credit were fully borne by the federal government through key changes in favor of the federal states and municipalities . This means an annual increase in the revenue shares of the federal states and municipalities by around 400 million.
The federal sector was also hit hardest by the corona crisis, the budgetary recovery is only progressing slowly, and according to current planning, there is no sight of a balanced balance at federal level. The federal government accounted for around 90 percent of public debt. In the previous year, on the other hand, the federal states reported the highest Maastricht surplus since the beginning of the data basis in 2001 with a plus of 0.7 percent of GDP (or plus 3.1 billion euros) for the first three quarters.
In the care sector in particular, there is a loud call from the federal states for greater compensation for their tasks. But here, too, the Ministry of Finance lists burdens in its own area, for example by maintaining the value of the care allowance. In addition, the federal states were provided with 340 million euros in 2018 and 300 million euros annually from 2019 as compensation due to the abolition of care recourse. Overall, care expenditure has risen from 3.2 to 3.9 billion since the beginning of the last financial equalization period on the part of the federal government.
