Austria's coalition agrees on 2027–2028 double budget, unveils housing construction package

Stocker characterised the package as 'a budget in a crisis, but not a crisis budget.' 'Es ist ein Budget in einer Krise, aber kein Krisenbudget,' he was quoted as saying, arguing that the plan creates 'stability in uncertain times and the conditions for Austria's upswing to succeed.' The government also pointed to international tensions it cannot influence, stating that it would 'provide stability where we bear direct responsibility.'

Savings and investment volumes

Vice Chancellor Babler welcomed the agreement as a 'balanced mix of structural, sustainable consolidation measures and targeted measures' that 'enables public finances to be stabilised while also providing economic stimulus.' He said the double budget pursued a 'clear claim' of 'Stabilität, Verlässlichkeit und klarer Orientierung.' Meinl-Reisinger likewise praised the 'konsequente Sanierung des Staatshaushaltes' and expressed confidence that the plan would allow Austria to leave the EU deficit procedure.

The savings volume amounts to approximately 2.5 billion euros, with a further 2.5 billion euros to be freed up for what the government calls 'Zukunftsgestaltung' – future shaping. Federal expenditure is to fall from 24.1 percent of GDP in 2026 to 22.8 percent by 2028 through administrative and personnel savings combined with greater use of digital tools. Climate-damaging indirect subsidies are to be cut by 150 million euros per year from 2028 onwards, accompanied by an ecologisation contribution.

Priority spending: housing, education, women's affairs, defence

Defence spending is set to rise to 5.3 billion euros in 2027 and to 5.43 billion euros in 2028. The women's budget is to be increased to just under 51 million euros, a 'historic high' according to the coalition, while an additional 340 million euros in active funds will go towards expanding elementary education to enable a second mandatory kindergarten year. A planned housing construction package is designed to make it easier to access federal funds for subsidised housing.

Among the structural measures, the government confirmed a one-percentage-point reduction in non-wage labour costs from 2028 onwards, the reintroduction of the agricultural diesel subsidy (Agrardiesel), an extension of the industrial electricity bonus and industrial electricity price, an extension of the strategic gas reserve, and the introduction of an energy crisis mechanism to cap electricity prices. The National Council session begins on Wednesday at 10:00 after the council of ministers meets; there will be no regular current affairs hour because of the budget speech.

Structural reforms and energy measures

The report is based on coverage by the Austrian Press Agency (APA) dated 7 June 2026. With the political framework now agreed, the parliamentary debate in the coming week will determine the final shape of the double budget and the legislative acts needed to implement it.

The coalition's communication strategy emphasises both fiscal discipline and visible social investment, framing the package as a bridge between consolidation and growth. Stocker's repeated insistence that this is 'not a crisis budget' signals an attempt to reassure markets and the public that the government intends to keep reducing the deficit while still funding priority areas such as housing, care, education and security.