Anger as government eyes mineral oil tax increase

Car clubs have turned their guns on the government over plans to raise taxes on mineral oil (MöSt).ÖAMTC said today (Thurs) the coalition of Social Democrats (SPÖ) and the conservative People’s Party (ÖVP) was “lacking ideas” in its attempts to restore the state budget as government officials hinted towards higher MöSt from next year.The motorists’ association warned an increase of MöSt would not lead to higher tax revenue since such a measure would diminish the number of Germans, Italians and Czechs coming to Austria to fuel their cars. This activity is known as fuel tourism. Around one fifth of overall MöSt revenue was down to it, according to ÖAMTC.The car club said ÖVP Finance Minister Josef Pröll raked in 3.8 billion Euros of MöSt last year, adding that the fuel tourism’s annual share was set to soar from 794 to 830 million Euros from 2009 to 2010.Regular car petrol is currently taxed with 44.2 Eurocents, while one litre diesel fuel is burdened with 34.7 Eurocents.Now ÖVP Economy Minister Reinhold Mitterlehner said a “slight increase” in the current taxation rates were “possible”. The minister added he was generally in favour of getting the state debt in order by making cuts rather than raising tax levels.Mitterlehner said today commuters living in the countryside who were using their cars to reach their workplaces in the cities due to inadequate public transport options would still receive a certain amount of compensation.Fritz Amann of the opposition Freedom Party’s (FPÖ) Association of Businessmen warned that commuters, consumers and the economy will all suffer if MöSt were upped. Amann said he saw no signs of the eco-tax approach promised by Pröll. He said: “The finance minister had some years to improve the railway network as an allternative to car traffic. But it seems Pröll is planning nothing else than ripping people off.”Robert Lugar of the opposition Alliance for the Future of Austria (BZÖ) claimed the SPÖ and ÖVP had no simply better ideas than raising taxes.Car club Arbö announced: “Drivers did not cause the economic crisis. But it seems they will have to bear the brunt.”Arbö also warned that families, commuters and people living on the countryside would be hit the hardest by higher MöSt.Federal Railways (ÖBB) boss Christian Kern said recently increased MöSt would be a big help in his struggling company’s attempts to sell more tickets.”I would not have any problems as far as the occupancy rate of ÖBB’s trains is concerned if the mineral oil levy was doubled,” he told the Salzburger Nachrichten newspaper.Traffic Club Austria (VCÖ), an independent research organisation for more eco-friendly individual traffic, would also welcome plans to increase MöSt. The body dismissed claims that higher MöSt rates were socially unfair. It explained: “The quarter of Austrians who are earning the most cover four and a half kilometres more than the quarter of residents who earn the least.”VCÖ also labelled Austria as a petrol discounter since car fuel is cheaper in the country than in 16 of the European Union’s (EU) 27 member states.The organisation – which has been campaigning in favour of more investment in public transport – pointed out that cheap car petrol was leading to more traffic, which in turn causes higher greenhouse emission levels.This warning comes only days after the European Commission (EC) said that Austrians were each responsible for 10.4 tons of greenhouse gas emissions on average in 2008, up from 10.2 tons in 1990. The announcement has been regarded as another throwback for the Austria’s attempts to present itself as an eco-friendly nation.The EC stressed Austria was one of just seven EU members whose  per capita emissions rate increased between 1990 and 2008. The 2008 result means Austria dropped four places within the EU-27 to rank along with Poland in 14th place.The SPÖ-ÖVP coalition is pressed to reduce the soaring state debt and the high budget deficit during the next three years to avoid sanctions by the EU. The Austrian budget deficit soared from 0.4 per cent in 2008 to 3.9 per cent the next year. The rate equals around 70 per cent of the country’s annual gross domestic product (GDP). The EU’s Maastricht regulations enforce its members to keep the budget deficit below three per cent.Pröll was attacked by opposition chiefs when he explained just one day after the 10th October Vienna city parliament election that the government would present the annual budgets for the next three years instead of just their plans for 2011 this December.This announcement comes after the coalition claimed it would wait until December to react in the best possible way to ever-changing forecasts by economists and think tanks on how quick the European and Austrian economy will recover.FPÖ, BZÖ and the Greens, however, accused the government of deliberately breaching the constitution to avoid suffering losses in the 26 September Styrian election and in the Vienna ballot. The constitution says federal governments must present their detailed plans for the annual budget 10 weeks ahead of the affected year’s New Year’s Day. The federal government coalition partner’s alleged attempts to do well in the two recent provincial elections by holding back information on cuts and higher taxes obviously failed with both the SPÖ and ÖVP sufferring losses in Styria and Vienna.Pröll said yesterday that the government will gather in Styrian spa town Bad Loipersdorf this weekend to finalise talks on how difficult it will be to cut the spending rates of each ministry in the upcoming years. The finance minister and ÖVP boss explained he hoped to be able to present a preliminary budget for the next three years before next Tuesday (26 October).The minister remained tight-lipped on the planned measures, but revealed some ministers had already agreed on suggested actions while he was still far from coming to a conclusion with others.Pröll announced earlier this year the plan was to reduce annual spending by 1.7 billion Euros while raising certain taxes or introducing new ones to achieve an extra 1.7 billion Euros of revenue per year.The coalition already agreed on a so-called bank solidarity tax which the country’s biggest financial institutes will be confronted with from 2011. SPÖ Chancellor Werner Faymann said this new levy should mean half a billion Euros of additional revenue per year. Faymann said the tax was a “fair and justified” measure since the government has supported Austria’s leading banks with billions of state aid during the past one and a half years to ensure they get through the recession.The SPÖ is also in favour of setting up a tax on assets and a levy on financial transactions and turnover in speculative investment deals.The ÖVP, meanwhile, said the upcoming annual budgets must have an “eco focus” to ensure renewable energy technologies are subsidised stronger than ever before.