The cabinet plans to launch the draft federal budget on Wednesday. Where the federal government sets priorities and what money is spent on.
It is a huge sum: the federal government wants to spend 445.7 billion euros in the coming year. However, this is around 30 billion less than this year, when, as in previous years, there was a lot of crisis-related spending, mainly because of the corona pandemic and the energy crisis. Now the plan is to switch to an austerity course.
The debt brake should be adhered to. After long and difficult negotiations, the draft budget is to be approved by the cabinet on Wednesday and then go through to the parliamentary process. There are usually some significant changes there. The Bundestag is to adopt the budget in early December.
work and social affairs
As every year, by far the most money is moved in the budget of the Ministry of Labor and Social Affairs. Almost 172 billion euros are to be made available for this in 2024, after a good 166 billion this year. That’s more than a third of the entire budget. According to the draft, 127 billion euros in tax money will be made available for pension insurance alone, after 121 billion this year – the federal government pays subsidies to the pension fund and also covers contributions for the time of raising children. “The subsidies, contributions and reimbursements are justified, among other things, by the fact that the statutory pension insurance takes on tasks for society as a whole,” says the Ministry of Labor. 24.3 billion euros are earmarked for citizen income in the social budget for next year, after 23.8 billion this year.
Family
Additional expenditure is planned for the child supplement that families with low incomes receive. Here the costs will increase from 1.9 billion to an estimated 2.2 billion euros in the next year.
Basic child security
With the planned basic child security, various family benefits are to be bundled and access and application simplified. Eligible families should be better reached and children and young people at risk of poverty better supported. The introduction is planned for 2025. Only: how much should it cost? This is controversial in the coalition. Lindner initially set two billion euros in the financial plan for 2025 as a “placeholder”. From the point of view of the Greens, this is clearly not enough, because there should also be improvements in performance.
Education
The budget of the Ministry of Education and Research will shrink from 21.5 billion euros in 2023 to 20.3 billion euros in the coming year. A large part of this has to do with the fact that the 200-euro energy price flat-rate, which was imposed once this year for students and technical students and has a total volume of 700 million euros – will no longer apply next year.
But less expenditure is also expected in the area of student loans: almost 1.4 billion euros for students are estimated, after 1.8 billion this year; for student loans 551 million after 763 million this year. The education and science union criticized: The traffic light coalition is systematically starving out student loans if they don’t adjust the rates to the galloping inflation and price explosion on the housing market.
In the federal budget for 2024, EUR 500 million is a particularly important educational policy project, the so-called Start Chances program: This is intended to provide special support to 4,000 schools nationwide “with a high proportion of socially disadvantaged students” – with money, but also with additional social workers. It is scheduled to start in the 2024/2025 school year.
Health and care
After the end of the acute corona crisis, the budget of Health Minister Karl Lauterbach (SPD) is shrinking. Expenditure of 16.2 billion euros is still possible – 14.5 billion of this alone is already tied to statutory health insurance as a normal subsidy. A subsidy of one billion euros for long-term care insurance, which was only introduced in 2022, will no longer be used as a savings contribution to household restructuring. However, Lauterbach immediately made it clear that there would be no cuts in benefits as a result.
Specifically, the sum should not flow into a care provision fund as a buffer for future times. The background is also a reform that has just come into force, which is intended to mobilize 6.6 billion euros more annually for care – through higher contributions that have been due since July 1st. However, this should also finance relief for those in need of care in the home and at home from the beginning of 2024. In the case of the SPD and the Greens, that was not enough for many. Without the prospect of more money from the budget, however, the chances of further improvements dwindle. And with the refusal to cut back on benefits, the next increases in contributions for care and for the statutory health insurance funds are becoming more likely.
defense
With an increase of 1.7 billion euros to around 51.8 billion euros, the defense budget stands out in the midst of the cuts. However, Minister Boris Pistorius (SPD) cannot be happy about a real increase for 2024, because the amount pretty much only covers the need that is necessary due to tariff increases. In the meantime, over 10 billion more had been discussed for the Bundeswehr.
The promise of a fully equipped and operational Bundeswehr must now be financed all the more from the 100 billion pot (“special fund”) that is planned for large armament projects such as the F-35 stealth jet, more modern armored personnel carriers or secure communication channels, but does not cover ongoing maintenance. In the coming year, 19.2 billion euros are to be invested from this pot. For the first time, the government also wants to meet NATO’s target of two percent of gross domestic product for defense.
rail
According to the draft, the focus of investments in the transport budget is on the rails – the rail network is partly dilapidated and should be renovated more quickly. The heads of the coalition had determined at the end of March that the state-owned Deutsche Bahn would need around 45 billion euros to cover the investment needs by 2027. This need should be covered “as far as financially feasible”, essentially from truck toll revenues.
According to coalition circles, these 45 billion euros will not be reached. There was talk of up to 34 billion euros by 2027 – but that was significantly more than originally planned. The federal government also wants to examine whether and to what extent the climate and transformation fund (KTF) – a special pot in addition to the budget – can make a contribution of 15 billion euros over the next two years to cover investment needs.
Billions in government revenue from emissions trading and CO2 pricing flow into the fund. However, numerous other projects are also financed from the KTF – for example, funding for the replacement of the heating system. Negotiations are still ongoing on the fund’s business plan.
The Greens expert Matthias Gastel said that the funding backlog at the railways had to be tackled even more actively. The railway industry association criticized the start for the rails. Significantly fewer investment funds were set aside for the modernization of the railways than the leaders of the coalition had agreed.
roads and bike lanes
Around 12.8 billion euros are planned for federal trunk roads, i.e. motorways and federal roads, slightly more than this year. Of this, around 11.5 billion are to go into the planning, construction, maintenance and operation of federal trunk roads. The federal government intends to spend around 263 million euros on promoting cycling and walking – around 150 million euros less than in 2023. For example, the construction of cycle lanes is to be cut.
Reside
Social housing is to be strengthened, 3.15 billion euros are planned and thus more than originally planned. There are also funds for urban development funding, for example.
Regional economic development
There had been a lot of excitement about possible cuts in regional economic development – especially in the east. The aim of the “joint task to improve the regional economic structure” is to support structurally weak regions and set incentives to create jobs. Funds of 679 million euros are now planned for 2024, which is even 32 million more than in 2023. This will be achieved through reallocations.