GOA PRESENTS 2006 BUDGET TO PARLIAMENT

UNCLAS VIENNA 000614

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TREASURY FOR OASIA/ICB/VIMAL ATUKORALA
TREASURY ALSO FOR OCC/EILEEN SIEGEL
TREASURY ALSO PASS FEDERAL RESERVE
SECDEF FOR OSD/ISP/EUR
USDOC PASS TO OITA
USDOC FOR 4212/MAC/EUR/OWE/PDACHER
PARIS FOR USOCED

E.O. 12958: N/A
TAGS: PGOV ECON EFIN AU
SUBJECT: GOA PRESENTS 2006 BUDGET TO PARLIAMENT

Ref: 04 Vienna 4146


1. On March 2, Austrian Finance Minister Karl-Heinz
Grasser presented the 2006 budget bill to parliament.
For 2006, the GoA forecasts federal budget revenues of
Euro 60.4 billion (USD 78.5 billion at the current
exchange rate of USD 1.30 for Euro 1.00),expenditures of
Euro 66.2 billion (USD 86.1 billion),and a deficit of
Euro 5.8 billion (USD 7.5 billion). The budget deficit
amounts to 2.2% of projected GDP. The GoA projects a
corresponding consolidated public sector budget deficit
in 2006 (EMU's Maastricht definition) at 1.7%, which
assumes that states, local communities and other public
bodies will produce a surplus of 0.5% of GDP. The GoA
still expects to return to a balanced budget in 2008.
According to GoA projections, the consolidated public
sector debt (encompassing all levels of government,
according to the EMU's Maastricht definition) will
decline to 62.8% of GDP at the end of 2006 from around
64% at the end of 2005. The 2006 budget bill is based on
real GDP growth of 2.5%.


2. The GOA had already prepared the 2006 budget bill
together with the 2005 budget last fall (reftel),but for
constitutional reasons did not disclose any details at
that time.


3. On March 3, parliament's plenary will hold a first
discussion of the bill. Starting March 8, parliament's
Budget Committee will discuss the various budget chapters
in detail, culminating in a final vote on the 2006 budget
scheduled for April 7. Embassy will provide more
information on the 2006 budget, including reactions, as
soon as details emerge.

BROWN