Public Finances 2019: Government revenue ratio increase and government expenditure ratio decrease, government surplus is at 0.7% of GDP

In 2019, public finances in Austria showed a surplus for the second time in a row. The surplus amounted to €2.7 bn or 0.7% of GDP in 2019 compared to €676 million or 0.2% of GDP in 2018. Government revenue increased by 3.6% or €6.8 bn, while government expenditure rose by 2.5% or €4.8 bn. In relation to GDP this results in the following ratios in 2019: revenue 49.1% (2018: 48.9%), expenditure 48.4% (2018: 48.7%), government surplus 0.7% (2018: 0.2%).

Detailed data for these ratios is taken from Statistics Austria’s compilation of public finances, as of 30 September 2020. Basis for the 2019 results are the final annual public accounts for federal government, state and local government as well as the final Finance Statistics of the Umbrella Association of Austrian Social Security Funds. Data on the numerous extra-budgetary units stem from individually available information.

Total government expenditure increased by 2.5% (€4.8 bn) in 2019 and stood at €192.5 bn. 45.2% of government expenditure was related to social expenditure in 2019 (+3.5%). Compensation of government employees, which constitutes around 22% of government expenditure, increased by 3.4%. Intermediate consumption (around 14% of government expenditure) rose by 3.8%. Support measures amount to around 10% of government expenditure. Gross capital formation showed an increase to €12.1 bn in 2019. Interest expenditure declined sharply in 2019 (-10.2%).

Total government revenue increased by 3.6% (€6.8 bn) in 2019 and stood at €195.2 bn. Social contributions and taxes, which accounted for 87.5% of government revenue, amounted to €170.8 bn (+3.8%). Revenue from taxes on production and imports (including value added tax) grew by 3.5% or €1.8 bn. Revenue from current taxes on income and wealth increased sharply by 4.2% or €2.2 bn in 2019. This is mainly due to the growth of the wage tax by €1.3 bn and of the income tax by €0.6 bn. Revenue from wage tax in 2019 amounting to €29.6 bn (+4.5%) is now above the level from before the tax reform (2015: €28.4 bn). Social contributions increased by 4.1% (€2.4 bn). 8.8% of government revenue stem from sales, amounting to €17.1 bn in 2019. Further information can be found under tax revenue and social contributions of general government.

Quarterly figures: Public budget shows high deficit again in the third quarter of 2020

In the third quarter of 2020, a high public deficit was again recorded, amounting to €5.7 bn, which equals 6.0% of the quarterly Gross Domestic Product (GDP). Compared to the third quarter of the previous year, this is decline of €7.8 bn resp. 8.1% of GDP (2019Q3: public surplus of €2.1 bn resp. 2.1% of GDP).

Whereas General Government revenue decreased by 6.9% resp. €3.3 bn compared to 2019Q3 (2020Q3: €44.7 bn, 2019Q3: €48.0 bn), General Government expenditure increased by 9.8% resp. €4.5 bn (2020Q3: €50.4 bn, 2019Q3: €45.9 bn). Within the same period, the GDP decreased by 3.4% resp. €3.4 bn (2020Q3: €95.6 bn, 2019Q3: €99.0 bn).

In the first nine months of 2020, the public deficit reached €20.8 bn, which accounts for 7.6% of the quarterly GDP, while in Jan-Sep 2019 there was a public surplus of €2.5 bn resp. 0.9% of GDP. General Government revenue decreased compared to the first nine months of 2019 by 6.8% resp. €9.7 bn (2020 Jan-Sep: €132.3 bn, 2019 Jan-Sep: 142.0 bn), while General Government expenditure increased by 9.8% resp. €13.7 bn (2020 Jan-Sep: €153.1 bn, 2019 Jan-Sep: €139.5 bn). Within the same period, the GDP decreased by 6.2% resp. €18.3 bn (2020 Jan-Sep: €275.6 bn, 2019 Jan-Sep: €293.9 bn).

The detailed figures of these results are compiled by short term public finance statistics in Statistics Austria and have been released on December 30, 2020. The results for 2020Q3 are based on preliminary accounting results of central, regional and local governments and the social security funds. Other units of General Government have been estimated on the basis of available information.

87.4% of General Government revenue in 2020Q3 resulted from taxes and social contributions, which added up to €39.1 bn. This total declined by 7.1% resp. €3.0 bn compared to 2019Q3.

The largest declines by value for General Government revenue in the first nine months of 2020 have been recorded in taxes:  In taxes on income, wealth, etc. (-11.8%, resp. €-4.5 bn) this is mainly due to corporation tax (-30.1%, resp. €-2.0 bn) and income tax (-42.2%, resp. €-1.5 bn). In taxes on production and imports (-8,7%, resp. €-3.6 bn) the decline is mainly driven by value added tax (-8.8%, resp. €-2.0 bn) and mineral oil tax (-22.6%, resp. €-0.8 bn).

In 2020Q3, 45% of General Government expenditure applied to social transfers (monetary benefits and transfers in kind), 20% applied to compensation of employees and 12% to intermediate consumption. All other expenditure items stayed below 7% of total expenditure.

The largest increases by value for General Government expenditure in the first nine months of 2020 have been observed in subsidies (+214.8%, resp. €+8.6 bn), this includes payments for furlough schemes and other subsidies like "Fixkostenzuschuss". The large increase in social benefits other than social transfers in kind (+9.4%, resp. €+4.9 bn) was due to higher payments for unemployment benefits and social benefits in hardship cases ("Härtefallfonds"). Since final data are not available for the Covid 19 measures, estimations have been applied, which will be adjusted to the latest level of knowledge in every publication.