Ultimate Blogging Challenge January 2026 - Cost Of Living

Photo by Gustavo Fring

This past week, I heard something inspiring in the news for once.

The Austrian federal government wants to combat high inflation by reducing the value-added tax on basic foodstuffs. The tax on selected products is to be more than halved from July 1, 2026, falling from ten percent to less than five percent. Financially, it’s probably a drop in the ocean. Politically, though, it’s clever. And socially, it sends a signal that many people have been missing for a long time: we see the everyday costs you are struggling with.

The proposal is simple enough. Lower VAT on basic food items. Finance it partly by charging low‑value parcels from non‑EU countries, think Temu, Shein, and similar platforms that currently benefit from the European Unions "De Minimis Rule", which allows duty-free entry for low-value parcels (under €150), leading to VAT and customs duty evasion on millions of low-cost goods, harming local businesses and bypassing safety checks, 

Photo by Claudio Schwarz on Unsplash

It’s not a magic solution, but it’s targeted, comprehensible, and felt at the checkout. No forms, no applications, no stigma. Everyone benefits, but lower incomes proportionally more.

And that’s where the contrast to Switzerland becomes uncomfortable.

Here, rents are climbing relentlessly. Health insurance premiums rise year after year. The official answer is often "Prämienverbilligung", premium reductions, but in reality these apply only to very, very low incomes. If you’re part of the broad middle class, earning “too much” to qualify but nowhere near wealthy, you’re largely on your own. You pay. 

Against this backdrop, the city of Zurich recently decided to fund basic healthcare for "Sans‑Papiers", undocumented people without health insurance. The city will pay for it. Supporters argue it is humane and ultimately cheaper than untreated emergencies. Both points can be true.

Still, the reaction from many residents is not rooted in a lack of compassion. It’s rooted in something else: perceived fairness.

When people who pay taxes, premiums and ever‑rising rents hear that new benefits are created, but not for them, it hits a nerve. The unspoken message feels like this: if you play by the rules and just manage, you don’t qualify for help. 

And: those who have entered our country illegally, work illegally, and do not pay taxes, are being rewarded, and at our expense.

And then there’s the question nobody likes to discuss: the pull effect.

We are often told it doesn’t exist. But we’ve seen it first‑hand. During the pandemic, a few days before Christmas 2020, the canton (state) I live in, closed its non‑essential shops. Zurich - our neighbor canton - didn’t. The result? Cars streamed toward Glatt and Sihlcity, the two major Zurich malls. Not because people suddenly loved Zurich more, but because humans take the path of least resistance. 

So when policymakers dismiss concerns that easier access to services might attract people from neighboring cantons, scepticism is understandable. Of course word spreads. Of course people talk. Especially vulnerable people rely on informal networks. A pull effect doesn’t require mass migration, just enough movement to strain trust.

Austria’s VAT cut feels different because it addresses a shared experience. Everyone eats. Everyone notices prices. Everyone benefits. It doesn’t single out groups, it reinforces a sense of collective inclusion.

Switzerland, by contrast, often tackles problems in a fragmented, highly targeted way. Humane, yes. Technocratic, certainly. But emotionally tone‑deaf to a middle class that increasingly feels invisible.

What’s missing is not solidarity, it’s balance.

If we want social cohesion, we need policies that help the vulnerable and acknowledge those who carry the system month after month. Austria may not be solving inflation, but it understands something crucial: people don’t just want support. They want to feel seen.

What are your thoughts on this?