Your headline is very misleading -- the proposed law cannot be considered a move towards "German only" in any way. There are still three official languages in Austria, as guaranteed by constitutional law. There are still bilingual road signs in certain parts of the country, bilingual schools, bilingual forms for all sorts of government business. This won't change. It shouldn't, as it's a fundamental part of the country's cultural heritage. Just like Italy shouldn't move to "Italian only", or -- as more extreme examples -- Switzerland to "Swiss German only", or Belgium to "French only". It wouldn't make sense at all. You might as well restrict American sports to baseball only.
The mentioned proposal just means that foreigners applying for citizenship should have a basic knowledge of the predominant official language in Austria, and that they will have to pass exams proving that. I think that's generally a fine idea, although the proposed implementation hasn't been well thought-out. For instance: if you've come to the country as a refugee, you probably didn't bring your savings account with you. As a refugee (or someone applying for that status - it can take years until things are decided), you are not allowed to work. So, if you like to stay and apply for citizenship: how are you supposed to pay for the language course? You'll have to depend on handouts -- which, of course, means that some right-wing idiots will blame you for exactly that.
f.