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Criticism of the federal government’s austerity package – changes possible
Have agreed on a compromise for the 2024 federal budget: Economics Minister Robert Habeck (l), Chancellor Olaf Scholz (M) and Finance Minister Christian Lindner. photo
© Michael Kappeler/dpa
The cabinet has dealt with the laboriously reached agreement on an austerity package. It is now the turn of the individual ministries to implement the decisions. The last word has not yet been spoken.
The criticism of the planned billion-dollar… The federal government’s austerity package shows no sign of stopping. Associations and opposition politicians complain about cuts in the social sector. There could be movement in the highly controversial plans to abolish tax breaks for farmers.
Cabinet deals with details of the decisions
The cabinet dealt with the details of the agreement. Government spokesman Steffen Hebestreit spoke of painful cuts that would have to be made.
According to Hebestreit, individual draft laws should be approved by the cabinet in January. The Bundestag’s budget committee is then scheduled to vote on the changes in mid-January. A budget week and the final budget resolution in the Bundestag are planned at the end of January. The budget could pass the Federal Council at the beginning of February – changes are still possible in the parliamentary process.
A week ago, after long negotiations, Federal Chancellor Olaf Scholz (SPD), Vice Chancellor Robert Habeck (Greens) and Finance Minister Christian Lindner (FDP) agreed on savings in the 2024 budget. After the Karlsruhe budget ruling, they had to plug a financial gap of around 30 billion euros in the core budget and in the climate and transformation fund.
On Tuesday, the government announced further details of the plans – the ticket tax for passenger flights is to increase. This means that the previously discussed introduction of a kerosene tax on domestic air traffic is off the table again. According to government information, the savings in the 2024 budget will be achieved primarily through the abolition of climate-damaging subsidies and the reduction of expenditure in individual departments, the better integration of refugees into the labor market and the reduction of federal subsidies.
Movement in agricultural subsidies?
Recently, thousands of farmers in Berlin took a stand against the cancellation of discounts on agricultural diesel and also the vehicle tax exemption for agricultural vehicles. Agriculture Minister Cem Özdemir (Greens) maintains his rejection of these savings measures. Özdemir has emphasized the position several times and nothing has changed in this matter, a spokesman said.
In view of the wave of protests in agriculture, several voices from the ranks of the traffic light parties SPD, Greens and FDP had already been raised to talk about alternatives. SPD parliamentary group deputy Dirk Wiese spoke in the “Bild” newspaper about a possible solution for small businesses. “A cap could make sense for agricultural diesel, because small farms with areas of up to 100 hectares are in fact particularly under pressure.” A cap could refer to a certain amount of diesel.
Farmers President Joachim Rukwied once again called for the plans to be stopped. “Anyone who offends an entire industry and rural areas so massively should not be surprised by escalating resistance.” If the proposals are not withdrawn, protests would continue and expand in January. A cap would also not be acceptable.
Development Ministry speaks of painful cuts
According to government figures, spending on Germany’s international engagement is to be reduced by a total of 800 million euros. Accordingly, the Foreign Office and the Ministry of Economic Affairs and Climate Protection should each contribute an amount of 200 million euros and the Federal Ministry for Economic Development and Cooperation 400 million euros.
“The cuts are very painful and will be felt in many areas,” said a spokesman for Development Minister Svenja Schulze (SPD). The department is currently working on implementing the austerity decision. “In view of the world situation, Germany should actually invest more resources in international cooperation and not less. Development cooperation is not a nice-to-have, but in our German interest. Because Germany’s prosperity depends on us having partners around the world and working together becomes.”
Criticism: Savings are anti-social
The German Social Association was “deeply disappointed” with the agreement on the budget. CEO Michaela Engelmeier said: “In a time of global crises, it is essential that the state increases its investments instead of implementing austerity measures in the social sector.” A reform of the debt brake and an increase in taxes for the super-rich are urgently needed.
While industry benefits from a reduction in electricity tax, consumers are additionally burdened by rising CO2 prices, said Engelmeier. “The access to the pension insurance reserves as a result of the reduction of the federal subsidy for pension insurance by 600 million euros counteracts statements that the pension insurance must be set up in a way that is generation-friendly.” Engelmeier called the planned cancellation of bonus payments for citizens’ money for further training particularly worrying.
The Left Chairwoman Janine Wissler said: “What the traffic light cabinet is putting under people’s Christmas trees is an imposition. Almost three billion should come from the pots for the unemployed, refugees and pensions, at a time when price increases are putting a strain on many and more and more people no longer know how to pay their bills.” There would be enough money if people were willing to tax corporations and the super-rich more heavily.
The AfD parliamentary group leader Alice Weidel criticized: “The coalition prefers to make cuts where it affects citizens and the service providers in society: farmers, pensioners, the manufacturing industry and air travelers.”