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MONEY

Austria’s 2023 budget: Where is the money going and how will it affect you?

Austria's Finance Ministry presented on Wednesday the government's budget for 2023. Here's what you need to know about the measures that could impact you.

Austria's 2023 budget: Where is the money going and how will it affect you?
A woman walks past a closed boutique store on the Graben, a shopping street in the city centre of Vienna. Prices on goods and services have risen in Austria. (Photo by JOE KLAMAR / AFP)

Austrian finance minister Magnus Brunner (ÖVP) on Wednesday presented his first annual budget to the country’s parliament, as he tried to get the message across that the finance measures weren’t all crisis-related.

It wasn’t an easy sell, given billions of euros have been earmarked and are still being spent on corona aid packages and anti-inflation measures.

Still, Brunner said the country would be “using the current challenges to set priorities” as he laid out plans involving increasing the military budget and investing in “social and economic security”.

READ ALSO: Milk, cheese and eggs by 19.5 percent: How food prices in Austria are rising

Overall, Austria will see its debt growing to € 367bn, but the government debt share of the country’s gross domestic product will fall slightly from 78.3 to 76.7 percent.

The country will also have to deal with interest payments doubling in 2023 as rates soar. However, the federal government’s net administrative finance balance amounts to a deficit of € 17bn in 2023 – an improvement of € 6.1bn compared to 2022.

The procurement of the strategic gas reserve, short-term inflation relief measures and measures to deal with the Covid-19 crisis have weighed heavily on the 2022 budget, the document presented by the Ministry of Finance said.

But what does this mean to the population and Austria’s expenditure in the coming years?

Priority points

The finance minister said several times that the budget wouldn’t be “purely a crisis budget”. Instead, he presented three priorities: the first was crisis management, but also investments in security and “ecological transformation of the economy”, with efforts to reduce (energy) dependency.

READ ALSO: ‘Mission 11’: Austrian government reveals tips on how to save energy and fuel

“The government is spending a lot of money to support industry in its ecological transformation and is investing in security, both military and economic, as well as in the security of supply”, Brunner said.

The “economic transformation” will be supported with €863 million in the coming year and a total of €5 billion by 2026.

Austrian finance minister Magnus Brunner (ÖVP) presents the country’s 2023 budget on October 12th 2022(Fotocredit: BKA/Dunker)

Further inflation-relief measures

From January to September, inflation in Austria more than doubled from 5 percent to 10.5 percent, the minister said.

Brunner stated this was a threat to the prosperity and growth of the past few years. Therefore, in 2022, measures against inflation amounting to €6.3 billion were implemented, explained the finance minister.

According to him, further relief measures totalling €30 billion are planned for the next few years – up to 2026. “It is important that citizens and companies can rely on the state”, he said.

Social Affairs and Health

The Social Affairs and Health Ministry will receive an extra €1 billion to its budget in the coming year, with minister Johannes Rauch setting the fight against poverty, care and health promotion as priorities, according to a press statement.

“In the coming year, we will implement measures that other social affairs ministers have been fighting for decades: Social benefits will increase yearly in the future. For the first time, the compensatory allowance and social assistance are increasing faster than pensions”, he said.

READ ALSO: More pay and longer holidays: How Austria hopes to attract 75,000 new nurses

Rauch also specified that the money would be used “where it is currently most urgent”. He mentioned the combat of poverty, cushioning the consequences of the pandemic and counteracting the shortage of nursing staff.

The minimum pension in Austria will be increased by a fixed amount of € 20 per month, according to the Social Affairs Ministry.

The 2023 budget also sets an important focus for people with disabilities: an additional €80 million are earmarked for improving social and professional participation, it added.

READ ALSO: What the Austrian government’s new pension package means for you

The minister also said health promotion and preventive care would receive €27 million next year, with most of it going towards vaccination programs. Still, some are going towards digitisation projects in the healthcare sector. For example, there is a plan for digitising the Mutter-Kind-Pass, the “mother child passport”, an essential document for those having babies in Austria.

The budget for art and culture is also increasing by 11.3 percent compared to last year.

READ ALSO: How could Austria’s new electricity price brake benefit you?

“Art and culture are the cornerstones of our society and must be preserved in all their diversity with strong public funding, even in difficult times,” said State Secretary Andrea Mayer in a press statement.

The most significant part of the budget increase, € 37.5 million, is dedicated to fighting the wave of inflation, the State Secretary for Art and Culture said. Of this, €22 million will flow into a renewed increase in the basic payments to the federal theatres and federal museums.

The remaining €15.5 million are available for funding adjustments in the area of ​​art funding.

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For members

LIVING IN AUSTRIA

How much do you need to earn for a good life in Austria?

Austria is known as a country with a high standard of living, but it also comes with a high cost of living. Here’s an overview of what you can expect to earn in Austria.

How much do you need to earn for a good life in Austria?

As with most things in Austria, the question of ‘what is a good salary?’ is difficult to answer as the cost of living (and wages) can vary between states and cities.

For example, the east of Austria is typically much cheaper than the west for housing (with the exception of Vienna). And those living in cities often have easier – and cheaper – access to public transport when compared with people living in rural areas. 

READ ALSO: ‘Bad-tempered locals’: Vienna ranked the world’s ‘unfriendliest city’

Childcare is also something to consider with huge differences between Vienna, where there is access to heavily subsidised services, and places like Tyrol where childcare costs more.

To delve a bit deeper, we looked at the data to find out the average salary in Austria and how it differs between professions and locations.

What is the average salary in Austria?

In 2021, the average gross annual salary in Austria was €44,395, according to the latest data from Statistics Austria

However, in the latest survey by online job platform Step Stone, the average gross annual salary in Austria is €49,609.

The Step Stone survey then broke it down further by industry with those working in pharma earning the most at €60,504. This was followed by energy at €60,345, medical technology at €59,106 and banking at €58,711.

The industry with the lowest average annual salary is hotels/gastronomy at €37,546, followed by agriculture at €39,779 and tourism at €43,965.

FOR MEMBERS: REVEALED: The best and worst districts to live in Vienna (as voted for by you)

Occupation also plays a part with people working in management earning the most – on average €66,768. Consulting came second at €53,721.

And like many other European countries, the gender pay gap in Austria prevails. The average annual salary for a man is €52,633 and for a woman it is €44,330.

Furthermore, the top earning city in Austria is Bregenz in Vorarlberg with an average annual salary of €54,620. When comparing the west of Austria with the east, the median salary in Vorarlberg is €46,450, whereas in Burgenland it is just €39,100.

What is the average cost of living in Austria?

Many international residents will find everyday living costs in Austria to be expensive, especially for those that come from countries with a much lower cost of living.

Inflation has also been rising steadily in Austria throughout 2022, leading to some steep rises in prices for groceries, housing costs and energy.

READ MORE: EXPLAINED: 10 ways to save money on your groceries in Austria

However, the average cost of living varies across the country, depending on the location. For example, Vienna and Innsbruck in Tyrol are two of Austria’s most expensive cities, but more affordable places to live are Graz in Styria and Klagenfurt in Carinthia.

In Vienna, the average price for a one bedroom apartment in the city centre is €915, going up to €2,000 for a three bedroom apartment, according to Expat Arrivals.

Whereas in Graz, the average cost of a one bedroom city centre apartment is around €609, and a three bedroom apartment is €1,170.

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