Lower Austria passes double budget for 2027 and 2028 with record deficit and 380 million euros in savings

What is new as of 17 June 2026

Compared with the year 2026, expenditure in the state budget is rising significantly. In 2027, revenues of 9.901 billion euros stand against expenditures of 10.5 billion euros; in 2028, revenues amount to 10.378 billion euros against expenditures of 10.923 billion euros. This corresponds to a rise of a full 21 percent in expenditures over the two-year period.

The largest expenditure driver is the healthcare sector: compared with 2026, spending on healthcare in the state budget rises by 227 million euros in 2027 and by 331 million euros in 2028. Social affairs (plus 14 percent) as well as education and childcare (plus nine percent) are also increasing. The budget report notes in this regard: "Weiters soll verstärkt auf ambulante Leistungen gesetzt werden".

The big-ticket items: Healthcare and education

In order to at least partially offset the additional expenditure, 380 million euros are to be saved. Finance Minister Kasser explained that the savings target and the stability pact would be adhered to. The savings are spread across numerous areas: in road construction, 40 million euros are to be saved; in state-owned real estate, 30 million euros; in the cultural sector, 23 million euros; and in refugee assistance, ten million euros.

In the search for possible savings, work had been done over the past months "quer durch den Gemüsegarten", said Kasser. He was "nicht zufrieden" with the result and would have liked to have saved even more. However, in his 30 years as a politician he had not yet experienced such a situation.

Debt level and stability pact

According to the available calculations, the state's debt level will rise to 11.7 billion euros by 2028. Kasser admitted to viewing this development "mit Schmerzen". "Die Lage ist ähnlich wie im Bund", said the finance minister. The declared savings target of 380 million euros and the stability pact would nevertheless be adhered to, he said.

A positive note is set by the 2025 annual financial statement, which turned out significantly better than expected. Instead of a shortfall of 891 million euros, the net financing balance ultimately stood at minus 450 million euros, not least because the federal government provided more funds following the floods of September 2024. From these funds, around 140 million euros will flow into the state budget in 2027 and approximately 213 million euros in 2028.

Savings in the personnel area

A cut is also planned in the personnel area. From 2027 onwards, every third position that becomes vacant in the state service will not be refilled. By the end of 2028, around 120 positions are to be eliminated as a result. The goal of a balanced budget in 2034 should nevertheless be upheld, Kasser emphasised. He spoke overall of a "Budget im Sinne der Kunst des Machbaren".

Savings are planned not only at state level but also at the federal level that affect pensioners. With January 2027, pensions will be increased by 2.95 percent. The pension bonus, which is granted in addition to the equalisation supplement after at least 30 years of work, will not be raised by 3.3 percent but "nur" by 2.95 percent. The equalisation supplement itself will be raised by 3.3 percent; likewise, those payments above the ASVG maximum contribution base of 6,930 euros are excluded.

Impact on pensioners

The reduced pension adjustment is to bring a total package of 223 million euros. The assessment basis is thereby significantly lowered from 92 to 69 percent. Expenditure in this benefit area is to be reduced by 50 million euros in 2027, 75 million euros in 2028, and 100 million euros in 2029. In future, a pension security contribution of ten percent is also to be paid on pension components between 100 and 150 percent of the ASVG maximum contribution base.

In return for the reduction, the federal government's partner contribution is being reduced by the same amount, to 5.4 percent. A partial reimbursement of social insurance contributions for those persons who had to pay higher contributions due to the new unified main assessment of 2014 will likewise no longer be available in the foreseeable future. With regard to cure benefits, efficiency is to be increased, as the budget report states: "Effizienzsteigerungen bei den Kurleistungen".

This relieves the labour market budget by around 60 million euros; the revenues of the pension insurance naturally decline in line with this. Social insurance carriers are to introduce "Maßnahmen zur Ausgabendämpfung" in this area. The own contribution rate is being raised by 0.4 percentage points to 17.4 percent, which is to bring in 6.16 million euros.

Minimum pension and equalisation supplement

Increases are also planned for the minimum pension: in 2027, it is to rise by 150 euros – in addition to the usual valorisation – and in 2028, a further approximately 50 euros per month of additional topping-up is planned. From then on, the increase is capped at 204.44 euros per month gross. The equalisation supplement, which is raised by 3.3 percent, is exempt.

The budget accompanying act for the upcoming double budget was presented to the National Council last week and was presented by Finance Minister Markus Marterbauer in the budget speech. Lower Austrian payments above the ASVG maximum contribution base are to be increased on an extraordinary basis over the coming two years. The state parliament in St. Pölten will consider the double budget in a two-day session on 1 July.

Despite all the cuts, Kasser expressed confidence that the goal of a balanced budget in 2034 could be achieved. With the draft on the table, they were in any case on track, the finance minister emphasised. The additional funds from the federal government's 2025 annual financial statement gave the state a certain financial leeway to cushion the foreseeable additional expenditure in the healthcare and social sectors.

Overall, the budgetary situation in Lower Austria remains strained. The combination of a record deficit, a rising debt level, and an ambitious course of savings in the face of growing expenditure in central areas such as healthcare and education poses significant challenges for state policymakers. The upcoming state parliament debates will show whether the planned savings are politically capable of securing a majority.