Austrian Finance Minister Marterbauer Pushes Employer Contribution Cut Amid State Opposition

Finance Minister Markus Marterbauer said he is confident a deal can be reached with the Austrian states over the planned reduction of the employer contribution to the Family Burden Equalisation Fund (FLAF). The federal government proposes to lower the contribution by one percentage point starting in 2028, which would cut state and municipal revenues by about €200 million. Marterbauer argues the cut will be offset by increased taxes that should bring an extra €550 million a year to the states, plus expected savings of €100 million in hospital payroll costs.

State leaders, notably Vorarlberg Governor Markus Wallner, criticize the proposal, insisting the federal budget should cover the shortfall. Wallner, who will chair the conference of state governors in the second half‑year, warned that the current plan shifts a fiscal burden onto the states. The governing SPÖ welcomed the overall 2027/28 budget as a “record budget for women” and emphasized solidarity, while NEOS highlighted benefits for early‑childhood education. The debate centers on how the federal‑state fiscal balance will be maintained after the contribution cut.