Austria plans to increase 'climate bonus' payouts but postpone CO2 tax

Amanda Previdelli
Amanda Previdelli - [email protected] • 13 Jun, 2022 Updated Mon 13 Jun 2022 10:31 CEST
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Read about the government saying no to reducing petrol taxes, inflation at its highest level since 1988 and more in today's roundup of important news. Pictured is somebody filling their car with fuel.

As inflation rises in Austria, the federal government wants to postpone the CO2 tax planned for July and increase the climate bonus payment to residents. Here's what you need. to know.

Austria's inflation rate is expected to reach eight percent, the highest rate in almost 50 years, driven mainly by increases in energy and fuel prices but its affected everything from food to travel.

The federal government is preparing a series of measures to contain inflation and cushion the impact on its population.

Transport Minister Leonore Gewessler (Greens) told broadcaster ORF the CO2 tax planned for July would be postponed until the Autumn, and the climate bonus payment would be increased to € 250 per person, regardless of wealth and income.

READ ALSO: The essential products that are getting more expensive in Austria

The CO2 tax is part of Austria's eco-social tax reform presented in 2021. CO2 emissions would be taxed at €30 euros per ton, making things like carbon-based fuel and heating more expensive in the country.

The reform brought in the "climate bonus" payment to compensate for the financial burden of the CO2 tax. The one-off bonus for Austrian residents would depend on the person's palace of residence and its connection to the public transport network.

The fewer public transport services available, the higher the payment - set at a maximum of €200 per adult person.

READ ALSO: EXPLAINED: Everything you need to know about Austria’s climate bonus payment

Postponed tax and higher payouts

As the war in Ukraine brought the energy and fuel issues even more to the spotlight in Austria, the government has been pressured to postpone the adoption of the CO2 tax and increase measures to cushion the rising cost of living.

The tax adoption will likely be postponed until the Autumn, according to the Transport Minister.

The Social Affairs Minister Johannes Rauch (Greens) also said there would be a further increase in the climate bonus payment, along with an adjustment of allowances, broadcaster ORF reported.

READ ALSO: What is Austria planning to do to cushion the rising cost of living?

Climate protection organisations and economists have criticised the plans.

Margit Schratzenstaller, an economist at the Economic Research Institute (WIFO), told the Austrian press that the postponement of the CO2 tax sends "the wrong signal" to the population.

However, most of the population (57 percent) are in favour of postponing climate protection measures to counteract inflation, according to an ATV poll.

A final agreement for the third package against inflation is expected in the next few days.

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Amanda Previdelli 2022/06/13 10:31

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