The Federal Principle

The federal principle provides for the sharing of tasks - legislative, executive and financial - between the nine Austrian Provinces on the one hand and the federal government on the other. It is therefore in contrast with the centralist form of organisation, where the legislative and executive powers are reserved to the central government. In legal terms, federalism – the federal principle – is enshrined in the Federal Constitution.

The Federal System in Austria

The federal system in Austria is characterised by the following elements:

  • The federal state and the provinces have legislative bodies of their own
  • They have executive organs of their own
  • The federal provinces participate indirectly in the administrative activities of the federal state (“indirect administration of federal law by provincial administrative authorities“)
  • The federal state and the provinces have their own systems of financial management, i.e. budgets of their own, and they may levy taxes and rates in their own right. However, only the federal government can levy important taxes such as the income tax, value-added tax etc., and the federal provinces receive funds from the federal government’s tax revenue under the system of revenue sharing. The revenue-sharing plan covers only a few years and is re-negotiated at regular intervals.

The federal principle is not only enshrined in Article 2 of the Federal Constitutional Law (B-VG), but results also from various other constitutional provisions that grant the federal provinces considerable scope of autonomy concerning provincial legislation and administration.

Rights and Competences of the Provinces

In concrete terms, the respective competences of the federal state and the provinces are laid down in what are referred to as the competence articles of the Federal Constitutional Law. They define

  • what matters are reserved to the federal level,
  • for what matters the federal level lays down the principles, leaving the decision on implementing acts to the provinces,
  • where the federal level holds the legislative power and the provinces have executive powers and
  • in respect of what matters the legislative power is reserved to the provinces.

The provinces are also involved in federal legislation through the Federal Council and share the executive power of the federal level within the scope of the indirect administration of federal law by provincial administrative authorities. In addition, the provinces may conclude treaties under international law with other states or parts thereof.

Legislative Matters Reserved to the Provinces

Legislation on the following matters is currently reserved to the provinces:

  • matters concerning provincial constitutions,
  • building regulations, housing promotion,
  • matters of regional planning and development,conservation of nature and landscape protection,
  • matters of tourism and public events,
  • waste management,
  • kindergartens and day-care centres and
  • community law

Federal and Provincial Legislation

Some laws passed at the federal level are to be implemented by the provinces. Matters in which the provinces adopt implementing laws to ensure the execution of the basic laws passed at federal level are:

  • maternity and infant care, youth welfare,
  • hospitals
  • electric utilities.

The EU and the Austrian Federal Provinces

Under Art. 23d B-VG the federal provinces have certain rights of participitation regarding projects within the framework of the European Union. They have to be informed without delay about all EU projects. If all provinces agree in their position regarding an EU project affecting a matter that falls within their legislative competence, their joint position is binding.

Federalism in Austria - a Weakly Developed System?

In view of the preponderance of federal competences federalism in Austria may be seen as a weakly developed system. Indeed, with but a few exceptions, the Federal Council’s veto power is only suspensive in character. In actual fact, however, the Conference of Provincial Governors, an institution whose existence and functions are not enshrined in the Constitution, has gained considerable political power. The administration of justice is reserved to the federal level. In the context of the administrative reform currently under consideration, plans are to establish administrative courts at provincial level.

Instruments of Control in the Provinces

The federal provinces have the right to establish ombudsman’s offices and courts of audit of their own. In principle, however, control instruments such as the Ombudsman’s Office and the Court of Audit are seen as joint organs of the federal and provincial levels.

The Österreich-Konvent

The issues of possible changes in the respective competences of the federal and provincial systems of government, the indirect administration of federal law by provincial administrative authorities and the position and competences of the Federal Council were among the primary issues that were supposed to be settled by a convention (Österreich – Konvent) convened in 2003. They continue to be at the focus of the debate on a constitutional and administrative reform, which has, however, at no point in time called the federal system into question.