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 - for the second time in a row - a surplus; a surplus of 0.7% of GDP (€2.9 bn), compared to a surplus of 0.2% (€676 million) in 2018. Government revenue increased by 3.6% or €6.7 bn, while government expenditure rose by 2.4% or €4.5 bn. In relation to GDP this results in the following ratios in 2019: revenue 49.0% (2018: 48.8%), expenditure 48.2% (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 31 March 2020. Basis for the 2019 results are the provisional annual public accounts for federal government, quarterly data for state and local government units as well as provisional data for the social security funds. A first estimate of the numerous extra-budgetary units was made based on individually available information.

Total government expenditure increased by 2.4% (€4.5 bn) in 2019 and stood at €192.2 bn. 45.2% of government expenditure was related to social expenditure in 2019 (+3.3%). Compensation of government employees, which constitutes around 22% of government expenditure, increased by 2.5%. Intermediate consumption (around 14% of government expenditure) rose by 3.1%. Support measures amount to around 10% of government expenditure. Gross capital formation showed only a slight increase to €11.8 bn in 2019. Interest expenditure declined sharply in 2019 (-9.7%).

Total government revenue increased by 3.6% (€6.7 bn) in 2019 and stood at €195.1 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 3.3% or €1.8 bn. Revenue from current taxes on income and wealth increased sharply by 4.3% 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). 8.7% of government revenue stem from sales, amounting to €17.0 bn in 2019. Further information can be found under tax revenue and social contributions of general government.

Quarterly figures: High public deficit already in the first quarter of 2020

In the first quarter of 2020, a public deficit of €2.6 bn was recorded in public finance, accounting for 2.7% of the quarterly Gross Domestic Product (GDP, WIFO Estimation). Compared to the first quarter of 2019 (2019Q1: €1.3 bn resp. 1.4% of quarterly GDP), this figure has increased by €1.3 bn resp. 1.4% and thus, almost doubled.

Compared to 2019Q1, General Government revenue increased only by 1.5% resp. €0.7 bn (2020Q1: €44.9 bn, 2019Q1: 44.2 bn), but General Government expenditure grew by 4.3% resp. €1.9 bn (2020Q1: €47.5 bn, 2019Q1: €45.5 bn). Within the same period, the GDP decreased by 1.5% resp. €1.4 bn (2020Q1: €95.7 bn, 2019Q1: €97.1 bn).

The detailed figures of these results are compiled by short term public finance statistics in Statistics Austria and have been released on June 30, 2020. The results for 2020Q1 are based on preliminary accounting results of central, regional and local governments and tenders of social security funds. Other units of General Government have been estimated.

88% of General Government revenue in 2020Q1 resulted from taxes and social contributions, which added up to €39.5 bn. Compared to 2019Q1, this figure increased by 2.4%, which represents €0.9 bn.

The largest increase in value for General Government revenue in the first quarter of 2020 were to be seen in actual social contributions (3.2%, resp. €0.4 bn), as well as in taxes on income and wealth (3.1%, resp. €0.4 bn). The increase in taxes on income and wealth is mostly driven by the wage tax (3.8%, resp. €255 mn) and the corporation tax (28.7%, resp. €196 mn)

In 2020Q1, 44% of General Government expenditure applied to social transfers (monetary benefits and transfers in kind), 21% applied to compensation of employees and 12% to intermediate consumption, all other expenditure items were recorded below of 7% of total expenditure.

The increase of General Government expenditure in the first quarter of 2020 is mainly driven by a raise of subsidies (151.1%, resp. €1.9 bn), this effect is mostly due to furlough schemes. There was also a notable increase in Social transfers other than in kind (4.1%, resp. €0.7 bn).

Information about impacts of the COVID-19-crisis on the results:

Though the largest impacts on the COVID-19-crisis on government revenue and expenditure are expected for 2020Q2, expenditure from measures like "Kurzarbeit" (“short-time work”, the Austrian furlough scheme) or "Fixkostenzuschuss" (subsidy to cover a part of ongoing costs) is already visible in 2020Q1, since ESA2010 stipulates an accrual accounting. According to this principle, measures have to be recorded in the same period when actions were taken, e.g. when short-time-work was realised or when ongoing costs were due – independent from the time of the payment.

Since Austria has taken extensive measures from mid March 2020 to stem the contraction of the coronavirus getroffen hat, part of the payments for „Kurzarbeit“ and „Fixkostenzuschuss“ have already been recorded in 2020Q1. According to ESA2010 these payments are to be seen as subsidies. Since also public enterprises are affected by „Kurzarbeit“, there are now subsidies received for the first time.

Since there is no final data available at the moment, all results are estimates, which will be revised whenever new information gets released.