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<p>Fiscal policy has increasingly become a field of conflict within the federal government in recent months. While the coalition agreement provides for compliance with the debt brake, investments in the energy turnaround, and further social and family policy reforms (such as basic child security, care reform, energy turnaround, infrastructure investments), the financial policy leeway is being reduced as a result of the energy price crisis and the interest rate turnaround. Thus, the Finance Minister’s plans point to drastically increasing expenditures for debt service. Since the debt brake aims at limiting government deficit, this directly reduces the leeway for primary expenditure if one refrains from tax increases and the debt brake takes effect in 2024. It remains to be seen whether the coalition’s previously planned projects can be implemented or whether new priorities should be set.</p>
</abstract>

Fiscal policy has increasingly become a field of conflict within the federal government in recent months. While the coalition agreement provides for compliance with the debt brake, investments in the energy turnaround, and further social and family policy reforms (such as basic child security, care reform, energy turnaround, infrastructure investments), the financial policy leeway is being reduced as a result of the energy price crisis and the interest rate turnaround. Thus, the Finance Minister’s plans point to drastically increasing expenditures for debt service. Since the debt brake aims at limiting government deficit, this directly reduces the leeway for primary expenditure if one refrains from tax increases and the debt brake takes effect in 2024. It remains to be seen whether the coalition’s previously planned projects can be implemented or whether new priorities should be set.

Budget Dispute: Prioritise Debt Brake, Taxes or Spending?

Wirtschaftsdienst

This work is licensed under the Creative Commons Attribution 4.0 International License.

Haushaltsstreit: Schuldenbremse, Steuern oder Ausgaben priorisieren?

Fiscal policy has increasingly become a field of conflict within the federal government in recent months. While the coalition agreement provides for compliance...

Budget Dispute: Prioritise Debt Brake, Taxes or Spending?

Published Online: Jun 14, 2023

Page range: 292 - 292

DOI: https://doi.org/10.2478/wd-2023-0091

© 2023 by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.