Due consideration of sustainable public investment

The general fiscal framework in the European Union contains numerous restrictions for the budget of the member countries. However, according to SNA rules on the spending side of the budget public investment is treated similarly to current expenditure. In contrast, accounting standards in the new Austrian budgeting laws (VRV neu), which is in effect from 2019 on, require the depreciation of public capital according to the real rate at which assets are used up. Against this background the study analyses whether the fiscal restrictions of the EU and the Austrian fiscal framework could be an obstacle for sensible and sustainable public investment. In particular, we investigate whether SNA-based rules hamper public investment due to the non-allowance for the depreciation of public capital goods in the calculation of stability-oriented budgets.