Budget Shockwave: Government Unleashes €5.1 Billion Cuts — Pensions and Salaries in Danger!
The federal government has agreed on the key framework for a double budget covering 2027 and 2028, aiming to reduce the deficit and stabilize finances. Chancellor Christian Stocker, Vice-Chancellor Andreas Babler, and Foreign Minister Beate Meinl-Reisinger presented the plan alongside Finance Minister Markus Marterbauer.
The budget includes savings totaling €5.1 billion over two years. Around half will come from austerity measures, while €2.6 billion will be invested in areas such as the labor market, care services, and elementary education. A reduction in non-wage labor costs is also planned from 2028, partly financed by companies.
Pensions are a central focus of the cuts, with adjustments to pension increases expected to fall below inflation levels next year. Details are still being finalized, but concerns have already been raised about the potential burden on retirees. At the same time, the increased bank levy will be extended for an additional three years.
The government also plans to introduce higher corporate income taxes for companies earning over one million euros in profit, along with increased unemployment insurance contributions for certain groups and a waiting period for social benefits. However, there will be no increases in property or inheritance taxes, and agricultural diesel subsidies are set to return.
The full budget is scheduled to be officially presented on June 10, 2026. While some organizations have praised measures like reduced labor costs as a boost to competitiveness, critics argue the package places too much pressure on pensioners, workers, and younger generations, fueling ongoing political debate.