Austria country brief

Introduction

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. Alexander Van der Bellen, a former Greens leader who ran as an independent, was elected President on 4 December 2016. He replaced Heinz Fischer, who served two terms as Federal President from 2004 until 2016.

The current coalition government between the Social Democratic Party of Austria (SPÖ) and the centre right People’s Party (ÖVP) was returned to government in 2013. Since May 2016, Christian Kern (SPÖ) has been Federal Chancellor. Sebastian Kurz (ÖVP) is the Federal Minister for Europe, Integration and Foreign Affairs. Early elections have been called for 15 October 2017.

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. Austria is the 2017 chair of the OSCE.

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 8.7 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 almost 53 per cent of GDP in 2016.

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’s aims include 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 and has signed the UN 2030 Agenda for Sustainable Development.

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 an attractive destination for Australian artists and musicians. In 2017, the Australian Gondwana Indigenous Children’s Choir performed joint concerts with the Vienna Boys Choir in Vienna. The Australian Chamber Orchestra, conductor Simone Young, the Sydney Theatre Company, Back-to-Back Theatre, the Belvoir Theatre and Indigenous performers such as the Djuki Mala dance group and didgeridoo player William Barton are some of the many Australian groups and individuals that have performed in Austria.

Australia has a number of bilateral agreements with Austria, including on social security, double taxation, mutual legal assistance, and aviation. Texts of bilateral agreements are available at the AUSTLII website.

Bilateral economic and trade relationship

Australian merchandise exports to Austria were $48 million in 2016. Australia’s main merchandise exports to Austria were gold coin and legal tender coin, measuring and analysing instruments, electrical circuits equipment and aircraft, spacecraft and parts. Australia’s merchandise imports from Austria totalled $1.4 billion and mainly included milk, cream, whey and yoghurt; civil engineering equipment and parts; goods vehicles; and motorcycles and cycles. The primary services trade between Australia and Austria is tourism. In 2016, more than 140,000 Australians visited Austria and 18,500 Austrians visited Australia.

Total Australian investment in Austria was $1.1 billion in 2016. Austrian investment in Australia was $3.6 billion in 2016. Around 80-90 Austrian companies have production facilities, sales offices and/or representative offices in Australia. Another 800-900 companies maintain regular business contact with Australia. Austrian investment is mainly in the areas of machinery, infrastructure (rail and road), communication systems and the electrical industry.

Some of the larger Austrian firms operating in Australia include Andritz (hydroelectric turbines); Voestalpine (VAE Railway Systems); Plasser & Theurer; Rhomberg (railway sector); Frequentis (public security and air traffic control systems); OMV (gas and oil exploration); Vamed (hospital management and operations); and KapschTrafficCom (traffic management).

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, IT, and niche areas of the highly diversified Austrian manufacturing sector.

Australian business operations in Austria include Macquarie Investment Management, IFM Investors, Cochlear and Derma Medical.

In 2010, Macquarie took over an Austrian asset management firm constituting a new hub for the Macquarie Funds Group in Central Europe. In 2015, Macquarie European Infrastructure Fund acquired a 25 per cent stake in Energie Steiermark (ESTAG), Austria’s fourth largest energy distribution company. 

In 2016, IFM Investors increased their share in the Vienna airport to approximately 39 per cent following their almost 30 per cent airport acquisition in 2014.

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

Last Updated: 29 March 2017