Vienna Budget 2026: Decision Now in December – What does that mean for us?

Vienna Budget 2026: Decision Now in December – What does that mean for us?

Things are getting exciting in the heart of Vienna: City Councilor for Finance Barbara Novak (SPÖ) announced today that the decision on the budget for 2026 will not be made in November, as originally planned, but in December. The new date is scheduled for December 17th. The reason for the delay is unclear framework conditions resulting from the ongoing stability pact negotiations. These uncertainties make planning considerably more difficult, as it is not clear how high the federal government's share of revenue will be, which accounts for 50 percent of the city's revenue. This information was reported by Puls24, which refers to the official statements.

The effects of the unclear political situation are far-reaching. If there are changes to federal tax legislation, this could result in further uncertainty regarding the income shares. The conditions for financing via the Austrian Federal Financing Agency (OeBFA) have not yet been determined. In this context, a cap on financing could lead to Vienna having to rely more on the capital market, which could potentially result in higher interest rates and thus costs.

Focus on budgetary savings

At the last meeting of the Stability Pact, no agreement was reached and possible sanctions for deficit procedures and the distribution of revenue to which the federal government is entitled are being discussed. In the context of these debates, the city of Vienna refers to its income from the bank levy. Despite these challenges, Novak is confident that the public service personnel budget will be renegotiated. The budget resolution is due on December 17th and one thing is certain: there will be no double budget for two years.

In order to reduce the deficit, Vienna plans to save at least 500 million euros. Budget execution is carried out in a disciplined manner - additional income is not invested immediately. High inflation and rising operating costs also have a negative impact on the city's finances. The high wages in the public sector also contribute to the financial burden. Nevertheless, Vienna remains better positioned compared to the federal situation.

Positive economic developments

While the city faces financial challenges, there are also positive signs. A boom in tourism leads to important income, and start-ups in the health and life science sectors make Vienna more attractive as a production location. Peter Huber from WIFO emphasizes that the development in the service sector and in the low-skilled labor market can be viewed positively. A balanced budget is important, and this is also reflected in the austerity measures announced at national level.

Finance Minister Markus Marterbauer has already announced that he will present a “transparent” budget, and the National Council is currently discussing a double budget for 2025-2026 and the federal financial framework for 2025-2029. A planned deficit of 18.1 billion euros for 2025 and 18.3 billion euros for 2026 is forecast. To address these pressures, a consolidation package of €6.4 billion for 2025 and €8.7 billion for 2026 is targeted, with a focus on solving spending problems, not revenue. However, the entire situation remains tense, as we have also learned from the results of the parliamentary committee.

In summary, it can be said that the coming months will be crucial in order to pursue a clear economic line and overcome the challenges facing the city of Vienna. The next stability pact negotiations are scheduled for mid-October, and it remains interesting to see how the situation will develop further. The city’s citizens can hope for a “sharpened” and future-oriented budget.

For more information you can visit the article Pulse24, parliament and Statistics Austria read.