Austria plans a significant reduction in the public sector to save 540 million euros by 2030
The Austrian government has unveiled a broad plan to reduce public sector spending, aiming to save a total of 540 million euros by 2030. According to the state office, 20% of these savings will be reinvested in digitalization projects to modernize public administration and enhance its efficiency.
The plan was approved on Saturday evening and includes a gradual path to reduce expenses across federal agencies, with expenditures expected to decrease by 1.5% by the end of 2027, 2% by the end of 2028, and 2.5% by the end of 2029. Authorities confirmed that the reduction will primarily occur through 'natural attrition' from jobs, such as retirement, without resorting to direct layoffs.
Accordingly, the number of employees in public administration is expected to decrease by about 6% by 2029, equivalent to approximately 2,600 full-time jobs. The government clarified that the cumulative savings will reach 540 million euros by 2030, with annual savings stabilizing at around 250 million euros thereafter. At the same time, 108 million euros will be allocated for digitization projects aimed at modernizing administrative processes and improving overall performance.
Officials described the plan as a step towards a modern and efficient public sector capable of meeting future demands. Coalition party representatives expressed their support for the plan, emphasizing that the reforms focus on improving the efficiency of the internal system instead of placing additional financial burdens on citizens.
In the first phase, a comprehensive review of the current job filling mechanisms will be conducted until June 2026. After that, independent experts and representatives of employees will present detailed proposals for implementing savings and modernization measures. Some sectors will remain exempt from cuts, including security, police, judiciary, education, and armed forces, and external appointments for people with disabilities at a rate of 60% or more will also be exempt from the new restrictions.