Austria country brief


Austria's capital Vienna is the base for a number of major international organisations, including the Organization for Security and Cooperation in Europe (OSCE), the International Atomic Energy Agency (IAEA) and the Organization of Petroleum Exporting Countries (OPEC). The United Nations (UN) has a major centre in Vienna.

Austria is a Federal Republic comprising nine provinces, each with its own provincial assembly and government. Legislative power is vested in a bicameral Federal Assembly. The Lower House, the Nationalrat, has 183 members elected for five-year terms. The Upper House, the Bundesrat, has 62 members elected by the provincial assemblies. Seats are apportioned in relation to the population of each province.

The Head of State, the Federal President, is elected by popular vote for a six-year term and is primarily a ceremonial role. The Federal President appoints the Federal Chancellor (the head of government) and government members. Heinz Fischer served two terms as Federal President from 2004 until 8 July 2016. His successor will be determined at a re-run of Presidential elections scheduled for 2 October 2016. Until the swearing in of a new President, the three Speakers of Parliament, Doris Bures, Karlheinz Kopf and Norbert Hofer, jointly perform the role of Federal President.

A Federal election was held in Austria in 2013 and the SPÖ/ÖVP coalition government was returned to government. Since May 2016, Christian Kern of the Social Democratic Party of Austria (SPÖ) has been Federal Chancellor. Sebastian Kurz (ÖVP) is the Federal Minister for Europe, Integration and Foreign Affairs.

Foreign policy

Austria has been an EU Member State since January 1995 and ratified the EU Lisbon Treaty in 2008. It is committed to strengthening the EU's role as an international actor, supporting measures to deepen the Common Foreign and Security Policy and the interests of South East European countries to integrate with the EU. Austrian Johannes Hahn has been EU Commissioner for European Neighbourhood Policy and Enlargement Negotiations since 2014.

While maintaining its neutral status, Austria is engaged in the NATO Partnership for Peace program. Austrian troops are deployed in a range of NATO missions but Austria has no plans to join NATO. Austria was a member of the UN Human Rights Council for the 2011-2014 term. Its last term on the UN Security Council was 2009-10.

Economic Overview

Austria is a well-developed market economy with a skilled labour force and high standard of living. It has a population of over 8.6 million. Its economy is closely tied to other EU economies. The EU's eastward expansion and Austria's geographic location make it an attractive hub for regional trade. Austria is one of the leading foreign investors in Central and Eastern European countries. Its economy features a large services sector (e.g. tourism); a sound industrial sector and a small agricultural and forestry sector. Austrian exports of goods and services represented around 53 per cent of GDP in 2014.

Aid programming

Austrian Development Cooperation (ADC) strategies and programs are developed by the Federal Ministry for Europe, Integration and Foreign Affairs and implemented through the Austrian Development Agency (ADA). ADC aims at reducing poverty, conserving natural resources and promoting peace and human security in partner countries across Africa, Asia, South Eastern and Eastern Europe and the Caribbean. The Austrian Government has committed to achieving the 0.7 per cent ODA/GNI target in its Work Program 2013-18.

Bilateral Relations

Austria has had links with Australia since the beginning of European settlement. Austrians visited Australia as members of scientific, diplomatic and religious missions in the late 18th and 19th centuries. Most Austrian migration to Australia took place between the end of World War II and 1960. Today, the relationship is marked by strong people-to-people links with around 42,500 Australians of Austrian ancestry.

Austria is a magnet for Australian artists and musicians. In 2005, Australian conductor Simone Young became the first woman to conduct the Vienna Philharmonic Orchestra since 1935, and the first woman to conduct at the Vienna State Opera since the end of World War II. The Vienna Philharmonic Orchestra made a second successful tour of Australia in 2011. The Australian Chamber Orchestra (ACO), the Sydney Theatre Company, Back-to-Back Theatre and the Belvoir Theatre are some of the many Australian groups that have recently performed in Austria.

Australia has a number of bilateral agreements with Austria, including on social security, double taxation, mutual legal assistance, and aviation. In 2010, Australia and Austria signed the second protocol to the bilateral social security agreement. This amendment reduces the superannuation costs for Australian companies doing business in Austria and for Austrian companies operating in Australia.

Texts of bilateral agreements are available at the AUSTLII website.

Bilateral economic and trade relationship

IAustralian merchandise exports to Austria  were $75 million in 2014. Australia’s main merchandise exports to Austria were leather, gold coin and legal tender coin, electrical circuit equipment and civil engineering equipment. Australia’s merchandise imports from Austria totalled $1 billion, chiefly motorcycles and cycles, goods vehicles, non-alcoholic beverages and civil engineering equipment and parts. The primary services trade between Australia and Austria is tourism. In 2014, 15,600 Australians visited Austria and over 16,000 Austrians visited Australia.

Total Australian investment in Austria was $944 million in 2014. Austrian investment in Australia was over $4.8 billion in 2014. Around 70 Austrian companies have production facilities, sales offices and/or representative offices in Australia. Another 500 companies maintain regular business contact with Australia. Austrian investment is mainly in the areas of machinery, oil production, railway construction, communication systems, gambling and the electrical industry.

Some of the larger Austrian firms operating in Australia include Andritz (hydroelectric turbines); Voestalpine (VAE Railway Systems); Plasser & Theurer; and Rhomberg (all active in the railway sector); and Frequentis, (public security and air traffic control systems); OMV gas and oil exploration and AVL (through NTC Powertrain).

Austria's economic potential provides scope for further market opportunities in both goods and services for Australian businesses. Opportunities exist in tourism, biotech, financial services, education, research and innovation, and niche areas of the highly diversified Austrian manufacturing sector.

Australian business operations in Austria include Macquarie Capital GmbH, Derma Medical and IFM Investors. In 2010, Macquarie took over an Austrian asset management firm  constituting a new hub for the Macquarie Funds Group in Central Europe.

In December 2014, a fund advised by IFM Investors acquired a 29.9 per cent share of the Vienna Airport.

The Australian Trade Commission (Austrade) has an office in Frankfurt which covers Austria.

Last Updated: 8 July 2016