FPÖ-ÖVP: Savings Plan to Abolish Klimabonus and Education Leave

FPÖ-ÖVP: Savings Plan to Abolish Klimabonus and Education Leave

ÖVP parliamentary leader August Wöginger (left) and FPÖ budget and finance spokesman Hubert Fuchs. Image: APA/ROLAND SCHLAGER

 

Negotiators from the far-right Freedom Party (FPÖ) and the People’s Party (ÖVP) have unveiled their €6.4 billion consolidation package, aiming to strengthen Austria’s economy and avoid an EU deficit procedure this year.

The two parties are working towards forming a coalition government following the collapse of talks earlier this month between the ÖVP, the Social Democrats (SPÖ) and NEOS.

Key measures in the package include plans to abolish the climate bonus (Klimabonus) and education leave (Bildungskarenz), while increasing fees for services such as driving licences and passports.

Contributions from State-Owned Enterprises

State-owned enterprises are also expected to contribute to the savings plan, with the government aiming to raise an additional €450 million from dividends. Another €120 million is expected from changes to the ÖBB framework plan, which will likely cause delays to several infrastructure projects. In a significant move, the FPÖ and the ÖVP also announced plans to cut environmental subsidies by 20%, and the free climate ticket for 18-year-olds will be scrapped. A new motor-related insurance tax will be introduced for electric vehicles.

Cutbacks and Tax Changes

The negotiators are also targeting environmental subsidies, which will be “smoothed out,” as described by the parties. This includes the early removal of tax exemptions for purchasing photovoltaic modules.

The kilometre allowance for motorcycles will be halved to €0.25, and that for bicycles will be reduced to €0.12. However, the allowance for cars will remain unchanged.

Additionally, the government plans to expand the digital tax to include online platform providers and the sale of user data. The real estate transfer tax will also be adjusted to close a loophole related to share deals. Currently, when a buyer purchases a company that owns land, a reduced tax rate applies. The new plan will eliminate this advantage.

Taxation and Social Benefits

The package also includes plans to increase revenue from the gambling sector, with the government targeting a 10% rise in volume, although the specifics are yet to be clarified. Meanwhile, the tobacco tax will see a freeze in the price component.

One of the more contentious proposals is a reduction in the ability to earn additional income while receiving unemployment benefits, with this option set to be significantly restricted. However, the negotiators have clarified that there will be no suspension of the annual increase in social benefits this year.

Pension Reforms and Ministry Savings

As part of efforts to reduce state expenditure, the negotiators are considering raising the effective retirement age. There are also discussions about introducing a partial pension scheme, which would allow individuals to continue working beyond the retirement age while receiving part of their pension benefits.

To further cut costs, the parties have set a savings target of €1.1 billion across ministries, which represents around 15% of total expenditure. Measures will focus on cutting costs in areas such as advertising, service contracts and ministerial departments.

Austerity Justified

Addressing a press conference in Vienna on Thursday, FPÖ budget and finance spokesman Hubert Fuchs stressed that these tough measures were essential to address Austria’s growing debt. “The mountain of debt has forced us to take this path of consolidation so that we can create the room for Austria to have a good future,” he explained. Without these reforms, he warned, Austria could face foreign control from Brussels, new taxes and pension cuts, which could trigger social unrest.

Despite these stringent measures, Fuchs assured his supporters that the FPÖ would keep its election promises, though he acknowledged that the timeline for implementation had changed. He also pointed out that no new taxes had been introduced, and that 86% of the savings plan would not rely on new revenue measures.

Don’t have an account yet? 

Latest News

Reach out for a handcrafted promotion of your business or product.