Austrian political parties’ plans for the economy

VIENNA – Austria holds a general election on Sunday with the next government facing an economy poised to contract for a second year running, and inflation that has outstripped the EU average.

Here’s what the main political parties propose on the economic front:

The far-right FPO, which narrowly leads opinion polls, wants deregulation and lower taxes, including:

– Cutting corporation tax on small businesses from 23% to 10%

– Scrapping a tax on carbon emissions introduced in 2022

– Price controls during times of severe inflation on food, rent and energy as well as reducing sales tax on essentials

– Expanding renewable energy while saying Russian gas will continue to be required

– Greater annual pension increases particularly of small and minimum state pensions

AUSTRIAN PEOPLE’S PARTY – OVP

Second behind the FPO in polls, the ruling conservatives also want lower taxes and lighter regulation, including:

– Progressively cutting employment taxes

– Making corporation tax at least 0.5% lower than the average rate among EU member states

– Gradually cutting tax take as a percentage of GDP to 40% from 43.1% in 2022, according to OECD data

– Putting automatic expiry dates on laws that introduce new regulations so they are only renewed if necessary

– Removing two regulations for each new one introduced

– Self-sufficient energy supply based on renewables, without mentioning a timeframe

SOCIAL DEMOCRATS – SPO

Polling around 20% of support, the leftist SPO calls for a shift in the tax burden from income to assets, saying this will allow them to cut taxes for 98% of taxpayers.

They propose:

– Bringing corporation tax back to 25% from the 23% that the OVP-Greens coalition reduced it to

– Special levies on energy companies and banks that have profited from rising energy prices and higher interest rates

– Gradually turning state holding company OBAG into the main vehicle for promoting renewable energy and the green transition, including using dividends paid to it by companies like oil and gas firm OMV and A1 Telekom Austria to fund it

– Quickly reducing dependence on Russian gas

– Testing a four-day working week with companies and unions

NEW AUSTRIA – NEOS

The liberal party is polling about 10% and calls for:

– Reducing employment taxes so workers take home more pay

– Abolishing capital gains tax for long-term stock market investments to boost savers’ returns and domestic investment

– Funding more apprenticeships and supporting vocational education to ensure it is seen as the equal of academic qualifications

– Moving away from fossil fuels and Russian gas, setting up “one stop shops” to expedite approval of infrastructure needed for the green transition

– Raising the retirement age to reflect greater life expectancy

THE GREENS

In coalition with the OVP since 2020 and polling about 8%, the left-wing Greens want a more active industrial policy and greater taxation of wealth instead of income.

They propose:

– Cutting subsidies for environmentally-damaging businesses to help fund infrastructure for the green transition

– Expanding a carbon emission tax introduced in 2022, and the “climate bonus” paid out to Austrians from the proceeds

– Abolishing licences for about half the jobs which today require them, such as travel agents, cooks and goldsmiths

– Making Austria draw all its power from renewable sources by 2030, with a law mandating a move away from Russian gas

– Progressively cutting the work week to 35 hours once skilled worker shortages have been addressed