Austrian Vice-Chancellor Resigns Over Tax Dispute

Austrian Vice-Chancellor Resigns Over Tax Dispute

Austria’s Finance Minister and Vice Chancellor Michael Spindelegger has resigned, citing pressure from his conservative People’s Party (ÖVP) to cut taxes at a faster rate than he was willing. The party is the junior member of a ruling coalition with the Social Democrat SPÖ party.

According to a report by The Local, he made the surprise announcement at 7am local time at a press conference at the Finance Ministry. It comes just one day after France’s cabinet was dissolved due to left wing rebels’ discontent over tax cuts and austerity.

The ÖVP and the SPÖ only just clung on to an overall majority as coalition partners in last year’s general election. Since then they have been in constant conflict over how to deal with the current economic climate, with the conservative partners pushing for more tax cuts to speed up the economy.

Although Spindelegger agrees that reform is necessary, he has said that tax cuts must come at “the right time”, making it clear that no tax cuts would be introduced unless they would not result in the introduction of new levies.

Austria’s Tax Freedom Day – the day on which Austria’s citizens stop working to pay taxes and start working for themselves – has fallen progressively later over the last few years: this year it fell on August 12th, but last year it was on July 31st and in 2012 it was on July 28th.

Referring to the internal conflict within his party, Spindelegger said: “There has to be cohesion in a party. If the cohesion is no longer there, the time has come to hand over the tiller”. Spindelegger has also resigned his post as the party’s chairman, prompting another leadership race. He stepped into the role in 2011 when his predecessor had to quit for health reasons.

“What is surprising is the timing,” said political analyst Peter Filzmaier. “No one could imagine that he would be the top candidate in the next parliamentary elections with chances to become chancellor. But…you don’t do this at the start of provincial elections in Vorarlberg in four weeks.”

The ÖVP is currently polling below 20 percent.