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Eurosceptic, Russia-friendly FPO tasked with forming

government

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Coalition talks with centre-right OVP started last week

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They announced planned savings of 6.4 bln euros on Monday

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Parties began elaborating on their plans on Thursday

By Francois Murphy

VIENNA, Jan 16 (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)