Austria's FPÖ And BZÖ Oppose Tax Hikes

by Ulrika Lomas, Tax-News.com, Brussels

28 January 2010

According to Heinz-Christian Strache, leader of the Freedom Party of Austria (FPÖ), the government’s recently approved “Stability Program” (Stabilitätsprogramm) is a clear sign that taxes are set to rise in the autumn, following the state parliamentary elections.

Leader of the Alliance for the Future of Austria (BZÖ), Josef Bucher, also views the stability program with skepticism, and has expressed his fears that the government will either elect to increase existing taxes or introduce new taxes.

Defending the government’s program, Austrian Chancellor Werner Faymann emphasized the need to “find a common solution.” Consolidation of the country’s budget is not to do with tax rises, he explained. The government’s top priority is to address the issue of expenditure, he added.

Despite these assurances, however, Chancellor Faymann nevertheless revealed that, if fair and just savings are to be made, then the introduction of a financial transactions tax and a solidarity contribution imposed on banks make sense.

Faymann confirmed that Austria’s coalition government fully supports the introduction of a financial transactions tax, which is currently being discussed within the European Union. Indeed, according to Finance Minister Josef Pröll, a decision is expected in 2011.

The government also aims to examine the idea of a solidarity levy on the country’s banks, Chancellor Faymann added.

Austria’s 2009-2013 stability program sets out a clear consolidation course, aiming to progressively reduce the country’s budget deficit from the current 4.7% to 2.7% by 2013. However, this will require savings of around EUR5.8bn. Pröll has referred to the proposals as “an ambitious program.”

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