Austria’s latest budget reforms are expected to fall most heavily on people with low incomes, according to a new analysis by the Austrian National Bank (OeNB). The report, released on Friday, looks at the real-life impact of cost-cutting and policy changes introduced by the country’s three-party coalition since 2025.
At the heart of the findings is a clear imbalance: households earning less are carrying a greater share of the burden. Changes in social insurance play a major role. For lower-income workers, higher unemployment insurance contributions reduce already tight budgets, while higher earners are mainly affected by an increase in the maximum contribution threshold.
Families with children are among those most affected. Many rely on part-time incomes, often from second earners, making them especially vulnerable to rising contributions. Cuts to social benefits add further strain, particularly for single parents and retirees. While pensioners receive some relief through a new activity allowance, it does not fully offset the broader impact.
The report also points out gaps in the analysis. Some measures that likely affect wealthier groups—such as tax changes on corporate profits, property sales, and benefits linked to company cars—could not be fully assessed due to limited data.
For businesses, the picture is mixed. Banks face the heaviest hit, with a higher levy increasing their tax burden significantly. Other sectors, however, benefit from lower labor-related costs, especially industries with large workforces like manufacturing, construction, healthcare, and education.
Overall, the OeNB describes the reforms as relatively supportive of economic growth in the short term and more focused on spending cuts than tax increases. Yet rising costs for pensions and government debt continue to weigh on public finances. As a result, Austria is unlikely to bring its budget deficit below 3 percent of GDP by 2028, leaving its fiscal challenges far from resolved.
