The coalition parties have today’s discussions on the pension increase for 2025 Budget Committee of the National Council also used to two further legislative packages to get on the way. On the one hand, this is about the Progression Compensation Act 2025, which the ÖVP and the Greens had already agreed on the basic principles in the summer. On the other hand, the 2024 amendment to service law is intended to bring about numerous detailed changes for the public service, with the content ranging from anti-corruption measures to mandatory management training to better pay for health and nursing staff in prisons or in the enforcement of measures.
Criticism of the procedure came from the opposition. On the part of the FPÖ, Gerhard Kaniak identified “half-baked legislative proposals at the last minute”. The FPÖ nevertheless agreed to the progressive compensation. Despite the SPÖ’s approval of the amendment to the service law, Alois Stöger (SPÖ) also considered it problematic to submit extensive new proposals at the last meeting. Karin Doppelbauer (NEOS) spoke of a disregard for parliamentary rules, which meant there wasn’t even time to take a closer look at the proposals.
The negotiations on a motion for a resolution from the SPÖ were postponed: It aims to regularly adjust the flat-rate tax allowances for people with disabilities to inflation.
Relief measures through the Progression Compensation Act 2025
The Progression Compensation Act 2025 determines how the 651 million Ꞓ will be distributed that will be available for variable relief for taxpayers in the coming year as a result of the abolition of cold progression. For example, the ÖVP and the Greens have agreed to increase the first five tax rates by 3.83% instead of 3.33%, as well as all tax deductions and related amounts such as the single earner and single parent tax deduction, the transport tax deduction, the pensioner tax deduction and to increase the Social Security refund by the full calculated annual inflation of 5%. The same applies to the exemption limit for the sixth of the year. In addition, the official mileage allowance for private cars used for work will be increased from 42 cents to 50 cents – plus an additional 0.15 cents for people transported. The same amount will apply to motorcycles and bicycles in the future. The transport subsidy anchored in the travel fee regulations as well as the tax-recognized flat-rate daily and overnight allowances for domestic business trips will also increase from 26.40 Ꞓ to 30 Ꞓ and from 15 Ꞓ to 17 Ꞓ.
Furthermore, it is planned to increase the small business limit relevant for sales tax exemption to 55,000 Ꞓ and to adjust the small business flat rate in accordance with the Income Tax Act to this limit. Low-income families will receive a special monthly payment of 60 Ꞓ per child for children up to the age of 18 beyond 2024, provided they are entitled to a single parent or single earner tax credit. The relevant income limit for the child allowance will be set at 25,725 Ꞓ for 2024 and will be automatically adjusted to inflation in the future.
Overall, the abolition of cold progression will reduce the burden on taxpayers by Ꞓ1.99 billion in the coming year, according to the explanations, with Ꞓ1.34 billion being attributable to the automatic two-thirds adjustment of all tax tariff levels.
In the budget committee, in addition to the ÖVP and the Greens, the FPÖ also voted for the matter. On the part of the ÖVP, Andreas Ottenschläger emphasized that all tax levels except the highest would be further reduced. In addition to Ottenschläger, Markus Koza and Jakob Schwarz (both Greens) welcomed the subsidy of 60 Ꞓ per child, the increase in the limit for small businesses and the adjustments to the mileage allowance. Schwarz was pleased that a “socially staggered third” of the compensation had been achieved with the over 650 million Ꞓ. Ottenschläger also announced that there would also be a new regulation for benefits in kind for company apartments through regulations, which would improve the framework conditions for employees in tourism, for example.
Hubert Fuchs (FPÖ) identified a complicated procedure in the distribution of the thirds of the compensation, but was able to gain something from some measures such as increasing the mileage allowance. Similar to Fuchs, Alois Stöger (SPÖ) also pointed out calls to increase the mileage allowance even further. Karin Doppelbauer (NEOS) emphasized that she did not find the redistribution over the third third to be effective. She also called for an impact assessment to be submitted to the plenary session. But she thinks the increase in the flat rate for small businesses is good. From her point of view, there is no need for an “overly generous mileage allowance,” she said on this topic.
Finance Minister Magnus Brunner said that the access to distribute the third third specifically is now also a model for other countries. An expert from the ministry explained that it is an international model for compensating for cold progression.
SPÖ wants to valorize tax allowances for people with disabilities
The Budget Committee has postponed discussions on a motion for a resolution by the SPÖ (4137/A(E)), which aims to retroactively valorize the flat-rate tax allowances for people with disabilities and automatically adjust them to inflation in the future. The amount of the allowance depends on the degree of disability and is, for example, 124 Ꞓ per year for a 25 percent impairment. Eva Maria Holzleitner (SPÖ) claimed that this urgently needed relief was simply forgotten in the 2022 tax adjustments. But it would be an extremely important relief for the target group.
The ÖVP and the Greens spoke out in favor of the postponement. The proposal goes in the right direction, but still needs to be discussed, said Angela Baumgartner (ÖVP). At the same time, she pointed out other relief measures such as increased family allowances in this area. Gerhard Kaniak (FPÖ) and Karin Doppelbauer (NEOS) signaled their fundamental approval of the demand for automatic inflation adjustment for these allowances.
Amendment to service law 2024 with a number of detailed changes
As is usual with amendments to service law, the 2024 amendment to service law also contains a number of detailed changes for the public service. For example, it is planned to take into account recommendations from the Group of States against Corruption (GRECO) set up at the Council of Europe and, for example, to define the term “conflicts of interest” more clearly and to tighten up the existing regulations for subsequent employment – for example for a change from the public service to a private company . In addition, in the future, section heads as well as group and department heads will generally be required to complete management training within five years, whereby this management training will focus on “compliance”. The aim is professionalization and consistent quality when carrying out management tasks in the federal service.
Various adaptations are also provided for in the tender law. In particular, they serve to simplify administration and provide clarification, although, according to the explanations, objectivity and transparency in the tendering process should not be compromised. For the first time, the secondary employment of contract employees is also regulated – based on the regulations for civil servants.
As already enshrined in law in the ASVG area, the amendment to the law will also give public employees the opportunity to accompany their (underage) child during an inpatient rehabilitation stay for up to four weeks. There are also improvements in the travel fee rates for foreign business trips and in the use of night trains and first class carriage. In the future, employees whose driving licenses have been revoked or who have been banned from carrying weapons will have to report this to the service authorities if the corresponding authorizations also play an important role in everyday work.
In order to counteract recruitment problems, the pay of health and nursing staff in prisons (e.g. in prison) and army medical centers will be improved. In addition, heads of institutes at universities of teacher education will in future be able to devote themselves to research activities. In the area of inclusive pedagogy at special schools, lateral entry into the teaching profession is made easier. The coalition parties have also agreed on accompanying salary regulations for the recently decided further development of teacher training.
The Federal Equal Treatment Act takes into account the fact that not only discrimination against women or men can occur, but also other gender-related discrimination – for example against non-binary people – can occur. In addition, the continued existence of contact women (women’s representatives) is decoupled from the effectiveness of the requirement to promote women.
In addition to the ÖVP and the Greens, the SPÖ also spoke out in favor of the amendment. On behalf of NEOS, Karin Doppelbauer called for an impact assessment. State Secretary Andrea Mayer sees the amendment as an important component in making the public service more attractive, also with regard to challenges such as demographic change. Among other things, she highlighted management training, the attractiveness of salaries in health and nursing and facilitation in the education sector from the amendment. (Final Budget Committee) gs/mbu
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