Austria announces 6 billion euro package to address cost-of-living crisis

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VIENNA, June 14 (Reuters) - Austria's conservative-led government on Tuesday announced a package of measures, which it said would cost six billion euros ($6.3 billion) this year, aimed at cushioning the blow to households of the rising cost of living.

The measures include increasing or topping up various benefits, including a 300 euro 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% of Austria's natural gas comes from Russia.

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Senior ministers told a news conference the measures included a particularly expensive item: eliminating the so-called "cold progression" by which taxpayers often slide into higher income-tax brackets since the brackets tend not to change while wages rise with inflation.

Finance Minister Magnus Brunner said the top tax bracket would not be affected. The others would automatically be increased to reflect two-thirds of annual inflation while a third would be allocated as parliament sees fit, Vice Chancellor Werner Kogler of the Greens said.

That measure would only be introduced from next year along with other structural reforms.

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

The bonus will be increased to 250 euros per adult per year, up from 100-200 euros depending on location. It will be topped up with a separate payment, not labelled a climate bonus, also of 250 euros a year, the government said. The introduction of the carbon tax is being pushed back to October from July.

($1 = 0.9582 euros)

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Reporting by Francois Murphy; Editing by Andrew Heavens and Raissa Kasolowsky

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