Trade unions and the social association VdK have sharply criticized the planned savings in the 2024 budget, especially in the social sector. “A cutback course is basically unnecessary, tends to be antisocial and harmful to economic policy,” said DGB board member Stefan Körzell of the German Press Agency. The government is sending the wrong signal with the budget. Cuts directly depressed domestic demand and economic output. “In view of the current, precarious economic situation, this is counterproductive in terms of economic policy.”
VdK President Verena Bentele said Augsburg General: “A strong welfare state is the foundation of our society, we must not allow it to begin to crumble and break.” She called for improvements, especially in the areas of the planned basic child security and the subsidies for health and long-term care insurance. “In Germany, three million children are growing up in poverty.”
The fact that savings should also be made on care or parental allowance is “neither sensible nor considered,” said IG Metall chairman Jörg Hofmann, according to a statement. “The traffic light got itself into this situation because it rules out tax increases and, in a year marked by war and inflation, the debt brake was activated again for 2023 – that took away the necessary leeway after the crisis.” Körzell was even clearer: “The debt brake is a brake on the future,” he criticized.
Instead, the DGB board called for additional government spending and “massive investments” in areas such as transport, infrastructure and digitization. “Hundreds of billions are being invested in future investments in China and the USA. If Germany slows down here, it will lose touch for a long time.”
Subsidy for long-term care insurance is eliminated
After long and difficult negotiations, the federal cabinet wants to adopt the government draft for the federal budget for 2024 this Wednesday. Federal spending is expected to be significantly lower after 476.3 billion euros in the current year: 445.7 billion euros are planned. After additional spending in previous years due to Corona and the energy price crisis, the debt brake anchored in the Basic Law should be observed again. The cabinet also approves the financial plan until 2027.
The traffic light government is not planning any cuts in services. In the case of parental allowance, the largest item in the budget in the Ministry for Family Affairs, however, the group of recipients should be restricted. Top earners should no longer receive the wage replacement benefit, only parents who together earn no more than 150,000 euros a year. Previously, this limit was 300,000 euros. Minister Lisa Paus (Greens) has so far not been able to assert herself with the desired sum of twelve billion euros for the planned basic child security, Finance Minister Christian Lindner (FDP) has initially only set two billion euros for 2025 as a “placeholder” in the further financial plan.
As a savings contribution, a subsidy of one billion euros for long-term care insurance, which was only introduced in 2022, will no longer be included in the budget. Federal Minister of Health Karl Lauterbach (SPD) immediately made it clear that there would be no cuts in benefits.
Bentele criticized that the subsidy provided for statutory health insurance was also lower than in 2023 and was therefore too low. Union faction Vice Mathias Middelberg (CDU), who in turn considers the cuts to be less attractive, said the New Osnabrück newspaper: “In fact, the minimal ‘savings’ are often just a matter of shifting the burden to the social security funds.”
After the cabinet decision, the draft goes into the parliamentary process. There are usually some significant changes there. The Bundestag is to adopt the budget in early December.