Mediation Committee
Cities are calling for improvements to the growth package
The Union only wants to agree to the law if the SPD, Greens and FDP forego the planned abolition of the tax break for agricultural diesel. photo
© Christoph Soeder/dpa
The mediation committee of the Bundestag and Bundesrat does not have to meet frequently. Today it is meeting on five laws. One thing has been causing hardened fronts for weeks.
The Bundestag and federal states are struggling to find a compromise for a billion-dollar growth package for companies. Before today The Mediation Committee in the Federal Council is demanding significant improvements to the law. “After painful cuts in the 2024 budget, the municipalities cannot cope with any further billion-dollar tax losses due to the Growth Opportunities Act,” said the general manager of the German Association of Cities, Helmut Dedy, to the dpa.
“That would tear the ground out from under us,” warned Dedy. It is right that the countries intervened. The Federal Council had blocked the project with various tax breaks for companies on the grounds that the states would have to bear a large part of the costs.
“It is particularly important to us that the trade tax is not reduced unilaterally,” said Dedy. The financial situation of the municipalities is already deteriorating dramatically. At the same time, they would have to invest in climate protection, education, heating transition and digitalization.
City Council: Without change, tax losses in the billions
According to the Association of Cities, without changes, the growth package would lead to tax losses of nine billion euros at the local level by 2027. In the mediation process, the volume of relief has already been reduced from the previously planned seven billion euros annually to 3.2 billion euros.
The Union only wants to agree to the law if the SPD, Greens and FDP forego the planned abolition of the tax break for agricultural diesel for farmers. Hesse’s Prime Minister Boris Rhein (CDU) told the dpa: “We expect a strengthening package for the economy and agriculture. The federal government must become more committed to supporting the economy.” Economic policy is the responsibility of the federal government.
Union parliamentary group vice-president: Compromise is feasible and possible
Union parliamentary group vice-president Mathias Middelberg emphasized: “A compromise is feasible and possible.” However, this must also include a solution for agricultural diesel. “The traffic lights still have to move a little bit. But we have also moved very far towards the traffic lights as far as the overall package is concerned.” If an agreement does not work, the traffic light is responsible.
Middelberg rejected criticism of the connection between the growth package and agricultural diesel. Relief for the economy cannot be counter-financed by putting a burden on an industry that is particularly characterized by medium-sized businesses. “It cannot be the case that farmers pay for the relief on the German economy as a whole.”
What the law provides
The law originally provided for tax relief for companies until 2028 and an acceleration of approval processes. The key point was a bonus for investments in climate protection, which was already overturned in the preliminary negotiations. The law also includes tax incentives to stimulate struggling housing construction. To promote investments, a declining balance of depreciation should be introduced, through which certain costs can be written off for tax purposes. Special depreciation is to be substantially improved for small and medium-sized companies.
SPD leader Lars Klingbeil called on the Union to give in. “If the Union is serious about its fully formulated ambitions for a strong economy, it must now give up its blockade in the Federal Council,” said Klingbeil to the Düsseldorf “Rheinische Post”. “It’s about ensuring that jobs are secured and new ones can be created here in the country. With the Growth Opportunities Act, we can give a boost to stimulate investment and innovation.”
Also Lauterbach’s online atlas in the mediation process
Also in the mediation process is a law with which Federal Health Minister Karl Lauterbach (SPD) wants to create an online atlas on the quality of treatment in hospitals in Germany. The Federal Council initially slowed down the “transparency directory” in November. It should be available there which clinic offers which services and what the treatment experience and staffing ratios are. The law also includes provisions for billions in additional liquidity for the clinics.
The controversial question of how an EU directive that deals with compulsory insurance for ride-on lawn mowers and similar machines should be implemented into national law will also be discussed. However, according to dpa information, two of the federal government’s projects to digitize the judiciary are not yet ready for a decision and are therefore not on the agenda. This concerns, on the one hand, the law on audio documentation of the main hearing in criminal proceedings and, on the other hand, the law on the increased use of video conferencing technology in civil, administrative, labor, financial and social courts.