This presentation was made by Friederike SCHWARZENDORFER, Ministry of Finance, Austria, at the 39th Annual SBO meeting held in Jerusalem on 6-7 June 2018.

1. Midterm Expenditure Framework
The Austrian Experience
Presentation for the OECD
Senior Budget Officials’ Meeting
June 2018
Friederike Schwarzendorfer
Deputy Director General, Austrian Ministry of Finance
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2. The Austrian Federal Budget Reform:
Primary motivation: Improved budgetary decision-
making
1st Stage as of 2009
National objectives for public finances
• Macroeconomic equilibrium
• Sustainable public finances
• Gender equality
Medium-term expenditure framework
2nd Stage as of 2013
• New Budget Structure
• New accounting system (including IPSAS)
• Performance Budgeting including Gender Budgeting
• Result-Oriented Management of Administrative Units
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3. • MTEF law sets expenditure ceilings (cash)
- for 4 years
- for 5 headings (rubrics): highly aggregated to reflect core
political areas, headings cover several ministries and are
divided in budget chapters
- for about 30 budget chapters (ministry specific)
• MTEF = legally binding for budget planning and execution:
- heading level: n+1 to n+4
- budget chapter level: n+1 (& n+2)
• Rolling forward planning: n+4 is added annually
• Additional: “Strategy Report” – more detailed information
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Expenditure ceilings
established - MTEF

4. • 2 kinds of ceilings:
• nominally fixed: ̴ 75% of expenditure
• variable according to predefined indicators for expenditure
areas with high exposure to economic cycle, depending on tax
receipts, refunded by EU, and payments from due liabilities
(e.g. unemployment payments)
• Advantage:
• The MTEF does not need to be changed
• the automatic stabilisers can work accordingly and exert a
countercyclical influence on the economy
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Expenditure ceilings
established - MTEF

5. Intentions by MoF - MTEF
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Ø Fiscal discipline supported:
- forces stakeholders to look at medium term developments
starting from the fiscal policy goals
- strengthens top down – approach in budgeting
- helps markets to assess budget credibility
- increases transparency for decision makers and public
- link to long term fiscal projection helpful
Ø MTEF- design matters:
- counter-cyclical effects helpful to align budget and
macroeconomic policy
- flexibility within strict expenditure limits crucial to motivate
spending ministries to act responsibly (allow redeployments and
carry forwards)
- focus on expenditure but don’t forget incentives to increase
revenue

6. Documents – MTEF - rubrics

7. Documents – MTEF - chapters

8. MTEF adjustments 2012-2020
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9. Timetable: August/October

10. Experiences
Original concept: MTEF in spring,
annual budget in autumn
à budget discussion two times a year
àLegal amendment:
àMTEF and Financial Act in autumn (OECD
recommendation already fulfilled)
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11. Experiences
àDebate in spring on stability programme and
National reform programme (aligned with the
EU requirements)
àOECD recommendation: „Pre-Budget Fiscal
Report“ as additional new document for
parliamentary discussion on the fiscal frame
(how does the economic outlook affect the
fiscal space)
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12. Experiences
• Cultural change: especially in the coalition
talks the multi year budget horizon has
become a topic.
• During the first years politics tried to avoid
changes in the ceilings shying away from the
political discussions in parliament à stabilised
the ceilings.
• Intention to establish MTEF ceilings as fixed
and normative upper limits has not been fully
realised.
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13. Experiences
• Line ministries treat expenditure ceilings as
„floors“ and starting point for negotiations.
• Regular annual revisions of the ceilings à
OECD recommendation: improving lack of
resilience in the fiscal framework by gradually
introducing a fiscal margin or „buffer“
• Buffer would also help to make the use of
„reserves“ from carry overs of the line
ministries work again.
• Adjustments are now under discussion in the
MoF 13

14. Thank you
Contact: friederike.schwarzendorfer@bmf.gv.at
MoF Homepage: https://www.bmf.gv.at/
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