The restoration of the republic in 1945 revived political activity in Austria. In general elections that November, the Austrian People's Party (Österreichische Volkspartei—ÖVP), successor to the prewar Christian Socialists, emerged as the strongest party, with the reborn Socialist Party of Austria (Sozialistische Partei Österreichs—SPÖ) trailing slightly. The ÖVP and SPÖ, controlling 161 of the 165 seats in the Nationalrat, formed a coalition government and worked closely with the Allies to construct an independent and democratic Austria. This coalition held until after the elections of 1966, when the ÖVP, with a majority of 11 seats, formed a one-party government headed by Chancellor Josef Klaus. In 1970, the SPÖ won a plurality in the Nationalrat and was able to put together a minority Socialist government under its leader, Bruno Kreisky. Kreisky remained in power until 1983—longer than any other non-Communist European head of government. The Socialist Party was renamed the Social Democratic Party in 1991, and began to advocate free-market oriented policies. It has also supported Austria's entry into the EC (now EU).
The ÖVP, also referred to as Austria's Christian Democratic Party, favors free enterprise, competition, and the reduction of class differences. Organized into three constituencies— businessmen, farmers, and employees—it advocates provincial rights and strongly supports the Catholic Church. The SPÖ, also known as the Social Democratic Party, advocates moderate reforms through democratic processes. It favored continued nationalization of key industries, economic planning, and widespread social welfare benefits. It is closely allied with the Austrian Trade Union Federation and its constituent unions. The economic policy differences between the two parties diminished in the 1990s as both recognized the need to introduce structural reforms and bring down budget deficits. Their main disagreements are on the pace of change, rather than on the need to introduce reforms.
A third political group, the Union of Independents (Verband der Unabhängigen—VdU), appeared in 1949. Strongly antisocialist, with anticlerical, pan-German elements, it challenged the coalition in the elections of that year, winning 16 seats. By the mid-1950s, however, the VdU, consistently denied a voice in government by the two major parties, had begun to disintegrate. In 1955, it was reorganized, under new leadership, as the Freedom Party of Austria (Freiheitliche Partei Österreichs—FPÖ). In 1970, with six seats in the Nationalrat, the FPÖ was accepted as a negotiating partner by the SPÖ. The party favors individual initiative over collective security. In June 1992, FPÖ dissidents founded the Free Democratic Party.
The Communist Party of Austria (Kommunistische Partei Österreichs— KPÖ) has declined steadily in strength since the end of World War II. It has had no parliamentary representation, for example, since 1959, when it lost the three seats won in 1956. The KPÖ was the first party in the Nationalrat to propose, in 1953, that Austria become a neutral nation.
In the elections of 24 April 1983, dominated by economic issues, the SPÖ (with 47.8% of the vote) won 90 seats, down from 95 in 1979; the ÖVP (with 43.21%) 81; and the FPÖ (with 4.97%) 12. The KPÖ polled 0.66% of the vote but won no seats. Two new environmentalist groups, the United Greens of Austria (Vereinten Grünen Österreichs) and the Alternative List–Austria (Alternative Liste Österreichs), likewise failed to gain representation in the Nationalrat, although they collectively polled more than 3% of the total vote. In May, Kreisky, having failed to win a clear majority, resigned. He was succeeded as party leader and chancellor by Fred Sinowatz, who proceeded to form a coalition government with the FPÖ.
Following the election of Kurt Waldheim to the presidency in June 1986, Sinowatz resigned and was succeeded by Franz Vranitzky, a former finance minister. The SPÖ-FPÖ coalition broke down in September 1986. Following parliamentary elections on 23 November 1986, a new government was sworn in on 21 January 1987, with Vranitzky from the SPÖ as chancellor and Alois Mock, FPÖ chairman, as vice-chancellor and prime minister.
In the general election of 7 October 1990, the "grand coalition" continued. The 183 seats in the Nationalrat were distributed as follows: SPÖ (80), ÖVP (60), FPÖ (33), and the Green Alternative (10). It also governed after the 1995 elections.
The 1999 elections finally brought change and was a watershed event. In the legislative election held on 3 October 1999, the 183 seats in the Nationalrat were distributed as follows: SPÖ (65), ÖVP (52), FPÖ (52), Greens (14), Liberal Forum (0). Compared to 1995 elections, The SPÖ lost 6 seats, the Liberal Forum lost all of its ten seats and had no representation in the new National Assembly, the ÖVP retained more or less its share of the vote, while the Greens went from 9 to 14 seats and the FPÖ went from 40 seats to 52 seats and became, together, with the People's Party, the second largest bloc in parliament. The leader of the ÖVP, Wolfgang Schüssel, formed a coalition with the FPÖ, and became chancellor.
Following the 24 November 2002 elections, party strength in the Nationalrat was distributed as follows: ÖVP, 42.3% (79 seats); SPÖ, 36.5% (69 seats); FPÖ, 10% (18 seats); the Greens, 9.5% (17 seats); the Liberal Forum, 1% (no seats); and the KPÖ,0.6% (no seats). Schüssel remained chancellor, and formed a government with the FPÖ, as he was unable to persuade the SPÖ and the Greens to join in a coalition with the ÖVP.