Research has consistently shown that many voters who disagree with fiscal austerity turn towards non-mainstream, often radical right parties after governments adjusts fiscal policy. While these studies convincingly establish an empirical association between austerity and an increase in the vote share of radical parties, the underlying mechanisms that lead to these findings remained untested. This paper aims to answer this question by examining how fiscal policy decisions, specifically cuts in spending (austerity), influence the support for policies that are in line with the policy stances of radical right populist parties. In line with the “us-versus-them”-narrative frequently used by the populist radical right, we assess how a context of austerity, makes citizens more discriminatory, by supporting policies that distribute public finances disproportionally towards people like themselves (natives) as opposed to foreigners. Leveraging original data from survey experiments fielded in France, Germany, and the UK, we find that the prospect of austerity and tighter fiscal space, on average, lead respondents to take more exclusionary, discriminatory stances. Looking at subgroups heterogeneity, we find that the support of discriminatory fiscal policies is particularly high among people who position themselves on the very right of the political spectrum. Our paper thus explains the rising support of the radical right by combining people’s preferences on the economic dimension of political competition with the people’s attitudes and preferences on the cultural dimension.