Tyrol Plans 15 Percent Reduction in Grants and Investments

In light of the challenging financial landscape in Austria, the Governor of Tyrol and Finance Officer, Anton Mattle, has announced significant budgetary cuts within the state administration. According to reports from the Tiroler Tageszeitung, discretionary expenditures, including grants and investments, will be reduced by 15 percent over the next two years.

Additionally, there are plans to decrease personnel costs, with approximately 80 positions expected to be eliminated annually within the administration. Mattle has instructed the relevant department to carefully evaluate future hiring and replacements, emphasizing that there will be no layoffs or a complete hiring freeze. This strategy aims to align the current workforce, which is around 3,700 employees, with the staffing levels of 2019 by the year 2027, returning focus to the core responsibilities of the state administration.

The proposed budget also includes a dual budget for 2026 and 2027, with the goal of avoiding any net new borrowing. In a communication to civil servants, Mattle stated that operational expenses must be clearly curtailed, indicating a necessity for a 15 percent reduction in discretionary spending.

For the fiscal year 2025, the black-red Tyrolean state government anticipates a net new debt of approximately EUR147.6 million. This comes two years after the implementation of a debt brake. Currently, the per capita debt in the region stands at EUR1,704, with projected revenues of EUR5.72 billion against expenditures of EUR6 billion.

Following the announcement of these austerity measures, critical responses emerged from both the Tyrolean Trade Union (ÖGB) and the opposition Freedom Party (FPÖ). ÖGB regional chairperson Sonja Föger-Kalchschmied expressed concern over potential cuts to vital social services, particularly in healthcare and support for individuals with disabilities. She stressed that any reductions in these areas should be off the table, warning that they would oppose any form of real wage losses and emphasized the importance of maintaining salary increases.

FPÖ financial spokesperson, Daniel Marschik, criticized Mattle's management, suggesting that the governor has failed to uphold his previous claims regarding Tyrol's financial stability and has instead resorted to budget cuts that reflect a lack of political influence at the federal level. Marschik argued that while some reductions are necessary, they must be accompanied by comprehensive structural reforms in administrative processes to ensure effective savings.

The FPÖ has also opposed the approach to managing state employees and returning to a dual budget system.