Austria's Coalition Mulls 'Uni Tax'

by Ulrika Lomas, Tax-News.com, Brussels

15 December 2011

Marking a dramatic about-turn, Austria’s ruling Social Democrats (SPÖ) are now open to the idea of a graduate tax to support universities in Austria.

During its recent party conference, the SPÖ had categorically rejected the idea of reintroducing tuition fees in Austria.

Coalition partner the Austrian People’s Party (ÖVP) has welcomed the change of course.

With the fact that the Social Democrats are now finally conducting internal discussions on tuition fees, Austria’s Vice Chancellor and ÖVP leader Michael Spindelegger indicated that talks could now take place on the idea of imposing a tax on new graduates.

Spindelegger underscored, however, that detailed discussions on concrete models could only take place once the SPÖ had made a firm decision in principle. Chancellor Werner Faymann (SPÖ) has confirmed that the party is currently considering various tuition fee and loan models, and announced that discussions can now take place, provided that the envisaged fees do not merely serve to create barriers for students from economically disadvantaged families.

SPÖ leaders in Lower Austria have already advocated the idea of imposing a so-called “Uni tax” on graduates in preference to tuition fees, insisting that top earners and rich individuals in Austria should contribute a larger amount to the country’s welfare and education system, including university graduates.

According to Lower Austria’s head of state Sepp Leitner (SPÖ), once graduate earnings exceed the average, graduates should be required to contribute, by means of a levy, to the education expenses of their successors.

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