Austria unveils €28bn package amid cost-of-living crisis

Government promises taxpayers as much as €1,000 in cash rebates each

Austria’s government promised taxpayers as much as €1,000 in cash rebates each and further subsidies to help buffer the effects of soaring inflation.

Households and companies will receive €6 billion this year and the next in direct benefits, with an added €22 billion of help through 2026 in the form of lower taxes. This comes on top of billions of euros already pledged to counteract rising electricity and natural gas prices.

Chancellor Karl Nehammer announced the new measures on Tuesday amid spreading voter discontent with his conservative People’s Party’s coalition with the Greens. Polls show the government’s popularity suffering as Austrians confront a cost-of-living crisis that has picked up steam since the onset of the nearby war in Ukraine.

The country’s planned levy on carbon dioxide emissions — its centrepiece climate reform — will be delayed until October.

“It’s clear these are extraordinarily difficult times, said Mr Nehammer. “We’re giving people back the money that inflation took away.

The measures include increasing or topping up various benefits, including a €300 payment this year to vulnerable groups such as the unemployed or those on the minimum state pension. Direct payments to “energy-intensive companies” are also planned this year, the government said.

Like many countries, Austria is grappling with inflation that has surged to its highest level in decades, partly because Russia’s war in Ukraine has driven up energy prices. Roughly 80 per cent of Austria’s natural gas comes from Russia.

Measures planned for this year included increasing a “climate bonus” softening the impact of the new carbon tax that will raise the price of items including petrol.

The bonus will be increased to €250 per adult per year, up from €100 to €200 depending on location. It will be topped up with a separate payment, not labelled a climate bonus, also of €250 a year, the government said. — Agencies