Austrian far right, conservatives plan cuts to climate measures

By Francois Murphy

VIENNA (Reuters) - Austria's far-right Freedom Party (FPO) and conservative People's Party (OVP) plan to improve the state's finances by scrapping climate-change-related measures and collecting more in dividends from state-owned companies, they said on Thursday.

The two parties, in coalition talks for just six days, held a news conference giving first details of how they would save 6.39 billion euros ($6.58 billion), an amount they had announced on Monday, to bring the budget deficit back within EU limits.

The eurosceptic, Russia-friendly FPO came first in September's parliamentary election with around 29% of the vote but was tasked with forming a government only after a centrist attempt to do so without it collapsed earlier this month.

One of the biggest items in their plan would be to save nearly 2 billion euros by eliminating the so-called "climate bonus", a payout of hundreds of euros a year to each taxpayer intended to redistribute proceeds from carbon-emissions-based taxation introduced by the outgoing OVP-Greens coalition.

A further 1.1 billion euros would be saved from ministries by reducing items such as spending on media advertising and political appointees.

FPO budget spokesman Hubert Fuchs said 430 million euros would be raised from dividends from stakes in companies held by the state, beyond the amount that the government would ordinarily expect to collect.

He did not disclose what companies would be the source of the additional income. Last year Austria's state holdings company OBAG received 1.67 billion euros in dividends, including around 400 million euros of exceptional dividends, from companies including utility Verbund and oil and gas firm OMV.

The parties said they would save 65 million euros by scrapping an exemption for electric cars to a tax on car insurance.

"There are roughly 200,000 electric cars in Austria. They benefit from almost 600 million euros in subsidies in total from various sources. Some of those are tax breaks that we believe are unfair and inappropriate, and we have therefore decided to act accordingly," Fuchs said.

They also plan to end a value-added-tax exemption for solar-panel installations and to extend a tax on power and energy companies' windfall profits to this year, they said.

($1 = 0.9716 euros)

(Reporting by Francois Murphy; Editing by Peter Graff)