Lindner’s budget draft
The biggest losers in the budget dispute
Finance Minister Lindner (FDP): Some colleagues don’t speak to him very well
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Because of the debt brake, there is little room for maneuver and significant savings must be made in Finance Minister Christian Lindner’s budget. But who is particularly affected?
Now it’s on the table: the federal government’s somewhat unfinished austerity plan. Christian Lindner, the Federal Finance Minister from the FDP, submitted his budget draft for 2024 to the Bundestag this week.
The government should be able to spend 445.7 billion euros next year – a good 30 billion less than in 2023. Almost all ministries will have to accept painful cuts, because Lindner makes it clear: the debt brake anchored in the Basic Law must be adhered to.
The budget law is still only a draft and will be discussed in detail in parliament. A lot can change before the budget is finally approved. Nevertheless: The criticism of the plan as it currently stands is immense. Social organizations in particular are horrified.
Who loses, who wins?
The Ministry of Health: Less money in nursing care funds
The Ministry of Health under Karl Lauterbach (SPD) has to accept the largest savings of all ministries. Instead of 24.48 billion euros, only 16.22 billion euros are earmarked for Lauterbach. This is mainly because the Corona crisis is over. During the pandemic years, the ministry was allocated much more money than is usual in a normal budget.
In order to save even more, the federal subsidy for statutory nursing care insurance should also be eliminated. Now it gets a bit technical: The federal government has so far subsidized long-term care insurance so that contributions for citizens do not continue to rise. They shouldn’t continue to do that. In order to compensate for the missing subsidy, the federal government wants to pay a smaller part of the contributions into pension funds from 2024. They were set up in 2015 to compensate for demographic change.
The health insurance companies strongly criticize this idea. The federal government is only postponing the financing problems of social care insurance into the future, explains the Association of Replacement Funds.
Voluntary services: One in four jobs at risk
Around 100,000 young people complete voluntary service every year: in care, in clubs, at school. The deployment sites have so far received financial support from the Federal Ministry for Family Affairs, but there are plans to save a lot here too.
Around 78 million euros less should be available for the voluntary social year and the federal voluntary service next year. That is around 35 percent less than in the current year. According to AWO estimates, one in four positions would be at risk: that corresponds to around 35,000 positions. Criticism comes, for example, from Diakonie Germany. It says that for many young people, voluntary service is the entry point into a social profession. “Anyone who saves here not only deprives young people of an important orientation perspective, but also endangers the future of our social infrastructure.”
Parental allowance: Those who earn a lot receive less parental allowance
The Family Ministry under Lisa Paus (Greens) is expected to get by with 13.35 billion euros in 2024, around 218 million euros less than in the current year. For this to work, it takes more than just saving money on volunteer services. The idea: For parental allowance, the income limit up to which the benefit is paid should be halved to 150,000 euros. The value for single parents remains at this level. The finance department had instead discussed benefit cuts, but this was avoided.
The losers in the draft budget are parents with an income of over 150,000 euros per year. “In my opinion, this is more manageable in this income class, and especially from the perspective of social justice, than for couples who earn significantly less.” Paus defended the plan in the Bundestag on Tuesday. The measure could save around 290 million euros compared to this year.
And who avoided the austerity measures?
In view of the tense security situation, the defense budget is excluded from the austerity requirements. Nevertheless, the money in the defense budget is not enough to cover the needs reported by department head Boris Pistorius (SPD). Although gaps are partly closed with money from the Bundeswehr’s special funds, this was actually intended for larger, additional investments. The long-term implementation of NATO’s two percent quota has not yet been financially secured.
Bafög training funding also remains formally stable. However, reforms that were actually planned are off the table for now, as is balancing high inflation.
Lindner also wants to stick to building up a capital stock for the stock pension he is planning. After ten billion euros this year, the finance minister wants to increase deposits in the coming years. The loans provided for this are not counted towards the debt brake because the debts are offset by capital accumulation.