Government dispute over?

Agreement on cold progression within reach before the break

Cold progression: In the next few days, Chancellor Karl Nehammer (ÖVP) and Vice-Chancellor Werner Kogler (Greens) want to finalize the distribution of the last third.

(Bild: APA/GEORG HOCHMUTH)

The turquoise-green coalition could possibly reach an agreement on the distribution of the last third of the abolition of cold progression sooner than expected. Negotiators are reportedly aiming to reach an agreement before the parliamentary summer break. 

In the next few days, Chancellor Karl Nehammer (ÖVP) and Vice-Chancellor Werner Kogler (Greens) want to finalize the distribution of the last third. The package is a "top priority", according to both party headquarters.

Cold progression was abolished in 2022
The abolition of cold progression took place in 2022. This is intended to ensure that taxpayers are relieved every year and end up with more net from gross.

After a relief volume of 1.85 billion euros in 2023 and 3.65 billion euros in 2024, Austrians are to be relieved by a total of around two billion euros in the coming year, according to the governing parties. "This means that the relief from the amendment to the law on cold progression since its abolition amounts to around 7.5 billion euros," emphasize both coalition partners.

Distribution of the third third must be re-agreed annually
Two thirds of the abolished creeping tax increase will be automatically returned to taxpayers by increasing the rate brackets. The distribution of the third third (currently 650 million euros) must be re-agreed each year.

According to the People's Party, the third third could be used to increase all rate brackets (except the 55%) by around 4%. "This would ensure that the higher levels, which mainly include people working full-time, would also be noticeably relieved," emphasizes the ÖVP.

For the Greens, the focus is on lower incomes and the fight against child poverty. This year, for example, the deductible amounts are to be fully adjusted to inflation again, meaning that people on the lowest incomes will benefit proportionately more.