In the past few days, there’s been a major shake-up in Austria’s ruling coalition between the conservative OVP and the Social Democrats. The OVP’s leader and Finance Minister, Michael Spindelegger, resigned on the 26th August and was replaced at once as party leader by Reinhold Mitterlehner. On 1st September, Hans Jörg Schelling was announced as the new Finance Minister.
Spindelegger had been at loggerheads with both the Social Democrats and much of his own party over his fiscal inflexibility and his opposition to tax cuts. Schelling, however, has extensive experience in business, ranging from furniture to banking, as well as having served as chairman of public service organisations. He’s an excellent negotiator, and can be expected to show far more sympathy than his predecessor to cuts in Austria’s dangerously high tax level.
So what can Austria hope for from this change? For a start, by healing the OVP’s internal divisions, it should make them a stronger force within the coalition. Turning away from Spindelegger’s fiscal dogmatism will mean the government’s financial policy can be more business friendly. Schelling is highly likely to introduce a stimulus package that includes a reduction in income tax.
This can only be good for investment, with both Austrian and foreign investors far more confident about taking risks. A stable economy creates the ideal environment for property investment, in particular. The kind of reforms the country can look forward to with Schelling in charge of finance will both encourage investment and will mean the average Austrian has a higher disposable income.
Inevitably, there’s going to be a rush to invest in holiday property in the mountains. Even during the recession this has been a good deal, but greater confidence in the economy will increase demand. Anyone with the resolve to get in before this will do very well.
The prospects for the Austrian economy look excellent for the coming years, and a strong Austrian economy can only be good for owners of holiday real estate. There’ll rarely be a better time to invest.
