Fiscal Equalisation System 2024 to 2028

The new fiscal equalisation scheme for 2024 to 2028 provides for additional annual funding of 3.4 billion € on average for the federal provinces, municipalities and social insurance. Of this, an annual average of around 1.2 billion € will flow into a "future fund", which will provide funds for the federal provinces and municipalities for elementary education, housing and climate. More funding will be provided also for long-term care and health. First steps are being taken towards performance orientation and a more efficient use of funds in the healthcare sector. However, fundamental reforms for better overall management in the long-term care and health sector have not been implemented. In addition, steps are being taken towards the greening of the fiscal equalisation scheme, which should be followed by further steps. Important structural reforms to align responsibilities for financing and expenditures at subnational levels, to unbundle transfers and to strengthen subnational tax autonomy as part of a federalism reform are not being addressed.