The Austrian Federal Budget Reform

The Austrian Federal Budget Reform is one of the most encompassing public sector reforms in the last decades. It addresses deficiencies of the current system such as a predominant focus on inputs, a lack of a genuine medium-term financial management framework, a control monopoly of classical cameralistics, a centralised und itemised approach of management of state bodies.

The reform is based on an amendment of the constitution which was unanimously adopted in Parliament in December 2007. The various reform elements are going to be implemented in two stages, as from 2009 and 2013.

A cornerstone of the first stage is the introduction of a 4-year medium-term expenditure framework (MTEF) with binding ceilings enacted into law. The draft for the MTEF is presented to Parliament together with the Budget Strategy Report. This report further explains the ceilings but not individual appropriations and thereby gives Parliament an opportunity to discuss budget aggregates from an economic and strategic point of view. The first stage of the budget reform additionally includes incentives for line ministries for a more efficient use of resources through increased flexibility in building reserves and carrying forward appropriations from one year to another.

The second stage of the reform will take into effect in 2013 with four instrumental key elements to be implemented: 1) New budget structure with “lump-sum budgets“ 2) Performance budgeting 3) Result-oriented management of state bodies 4) Accrual budgeting and accounting. The objective is to establish a coherent, integrative financial and management system and to close the links between budgeting and accounting, accrual and cash accounting as well as performance, financial and personnel management, both at the federal ministry and at the subordinated state body level. Overall, the budget reform is more than a purely conceptual, technical or legal amendment, it is intended to initiate a cultural change process in Austrian public management at federal level.

• Budgetary Reform in Austria (Working Paper) (1158 KB)
• The Austrian Federal Budget Reform (Presentation) (397 KB)

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