Factbox: Plans for the Economy by Austrian Political Parties

VIENNA – Austria is set to hold a general election on Sunday, with the incoming government confronting an economy that is expected to contract for a second consecutive year and inflation rates surpassing the EU average.

Here’s an overview of the economic proposals put forward by the main political parties:

FREEDOM PARTY (FPO)
Currently leading in opinion polls, the far-right FPO advocates for deregulation and lower taxes, proposing the following measures:

• Reducing corporate tax on small businesses from 23% to 10%
• Eliminating the carbon emissions tax implemented in 2022
• Implementing price controls on essential goods, such as food, rent, and energy during periods of high inflation, along with decreasing sales tax on necessities
• Promoting renewable energy while acknowledging the ongoing need for Russian gas
• Increasing annual pensions, especially for small and minimum state pensions

AUSTRIAN PEOPLE’S PARTY (OVP)
Trailing slightly behind the FPO in polls, the ruling conservative party is also in favor of tax reductions and lighter regulations. Their proposals include:

• Gradual cuts to employment taxes
• Setting corporate tax rates at least 0.5% lower than the EU average
• Reducing the total tax take as a percentage of GDP from 43.1% in 2022 to 40%
• Implementing automatic expiry dates for new regulations, which can only be renewed if necessary
• For every new regulation introduced, removing two existing ones
• Achieving an energy supply that is self-sufficient and based on renewable sources, although no specific timeline is mentioned

SOCIAL DEMOCRATS (SPO)
With about 20% support in polls, the leftist SPO seeks to shift the tax burden from income to assets, aiming to reduce taxes for 98% of taxpayers. Their proposals consist of:

• Raising corporate tax back to 25% from its current rate of 23%
• Imposing special levies on energy companies and banks that have benefited from increased energy prices and interest rates
• Transitioning the state holding company OBAG into a primary entity for promoting renewable energy and environmental initiatives
• Rapidly decreasing reliance on Russian gas
• Testing a four-day workweek in collaboration with businesses and labor unions

NEW AUSTRIA (NEOS)
Polls place this liberal party at around 10%, advocating for:

• Lowering employment taxes to increase take-home pay for workers
• Abolishing capital gains tax for long-term investments to enhance returns for savers and boost domestic investment
• Funding additional apprenticeships and enhancing vocational education to elevate its status alongside academic qualifications
• Moving away from fossil fuels and Russian gas while creating streamlined approval processes for infrastructure related to the green transition
• Raising the retirement age to align with increased life expectancy

THE GREENS
In coalition with the OVP since 2020 and polling about 8%, the left-wing Greens are pushing for a more active industrial policy and increased taxation on wealth rather than income. Their proposals include:

• Reducing subsidies for environmentally harmful businesses to finance infrastructure for the green transition
• Expanding the 2022 carbon emissions tax and distributing proceeds through a "climate bonus" to citizens
• Abolishing licenses for approximately half of the jobs currently requiring them, including positions such as travel agents and cooks
• Transitioning Austria to derive all its power from renewable sources by 2030, with legislation mandating a shift away from Russian gas
• Gradually reducing the workweek to 35 hours once skilled labor shortages are addressed