Anti-inflation package: cold progression before abolition

The federal government has almost completed its negotiations on an anti-inflation package. A presentation is expected in the coming days, according to government circles.

According to APA information, the government is likely to spend quite a bit of money to relieve the burden in many areas. The first funds should already flow in the summer. Both short-term and long-term structural measures are apparently planned.

The “money-back package”, as the government calls it, is intended to relieve broad sections of the population and cushion inflation quickly and unbureaucratically, especially for people on low incomes: According to reports, the abolition of cold progression, indexation, is fixed of social benefits, a climate bonus of 250 euros for everyone and the postponement of the CO2 price to October.

Valorizations are also planned

The cold progression has – to put it very simply – the effect that you have less net despite a salary increase, because the higher salary falls into a higher tax bracket. The federal government is now abolishing this “secret tax increase” for almost all tax brackets, according to negotiating circles today.

In addition, the deductions are valorised, especially for small incomes. In addition, selected family and social benefits are valued, i.e. adjusted to inflation. With these two measures, a broad and structural relief would be sought, “which applies permanently,” it said.

The previously announced postponement of CO2 pricing to October (instead of July) is also fixed. The compensation from the climate bonus is likely to be higher this year than previously planned. According to reports, everyone in Austria – regardless of where they live – should receive a climate bonus of 250 euros from October (half for children). Originally, a regional scale from 100 to a maximum of 200 euros was planned for this year.

Negotiations on the home stretch

According to insiders, the federal government’s negotiations are on the home stretch. A presentation of the package is planned for the next two days. According to representatives of the coalition parties, it is to be a broad and comprehensive package that includes both short-term immediate measures for all groups, and for groups particularly affected by inflation, as well as long-term effective reforms to provide relief. The government’s goal is to “give back” to the population the money that is eating up price and inflation.

“Negotiations are entering the home stretch so that we can quickly get the relief underway,” affirmed Social Affairs Minister Johannes Rauch (Greens) in a statement today. In the talks, he spoke out in particular for people with low incomes such as minimum pensioners, single parents, students and other groups particularly hard hit by inflation.

According to Rauch, the regular increase in social benefits in line with the respective price increases is particularly important to him.

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