New subsidy report: record billions for insulation and e-cars

The federal government pays more subsidies than ever before – spending on climate protection in particular is rising sharply. Critics still see some government funding in the wrong place.

The new subsidy report from the Federal Ministry of Finance comprises almost 580 pages. Lots of pages, lots of money. Federal subsidies are set to almost double within three years. In 2019 there were financial aid and tax breaks amounting to almost 25 billion euros. It is expected to be a good 47 billion euros in the coming year. So it is in the report that the ARD capital studio is available and which the Federal Cabinet wants to advise in the coming week.

Finance Minister Olaf Scholz from the SPD justifies the sharp increase in the preliminary letters to the report with climate protection: “The subsidy policy is part of the future-oriented financial policy of the federal government Federal. “

Help for building renovation and charging stations

One example of this is the subsidies for the purchase of electric cars. The Ministry of Finance calculates a total of 3.7 billion euros for this and the next year. The so-called environmental bonus was only increased last year. Buyers of all-electric cars now receive up to 9,000 euros. The federal government is providing a further 2.5 billion euros for the charging infrastructure. And almost six billion euros in grants will flow into energy-efficient building renovation this year and next.

The FDP budget expert Otto Fricke also considers it necessary to create incentives for more climate protection. But he doubts that massive subsidies are an efficient means of achieving climate goals. Fricke compares purchase premiums for electric cars with the Baukindergeld. “I don’t think subsidies make sense because they only create an artificial incentive and, secondly, ensure that only prices actually rise,” says the FDP politician. “In the case of electric cars, the prices will not fall as far as they actually could, because the buyer has more money available.”

Do subsidies increase prices?

And that is then like with Baukindergeld. “The Baukindergeld did not mean that the prices for the corresponding apartments or houses remained the same. Rather, because the buyers knew that there are now subsidies as well, the prices have gone up.”

Fricke also points out that once granted subsidies can only be abolished with difficulty – even if they initially only had a limited duration.

Climate costs not factored in

The budget expert of the Greens Sven-Christian Kindler sees it differently. Kindler believes that climate-friendly technologies should now be promoted with taxpayers’ money. From his point of view, the term subsidy used by the Federal Ministry of Finance is too narrow. “Many of the costs caused by the climate crisis, environmental consumption and species extinction are not included in the prices,” says Kindler. “That means we have to ensure that market participants also have a chance through government subsidies and incentives. But we also have to ensure that environmental costs are finally factored in.”

In addition, climate-damaging subsidies would have to be more dismantled. Kindler points out that diesel is subsidized with seven billion euros annually and that there is no tax on kerosene.

According to a report by the Ministry of Finance, subsidies will account for 1.3 percent of gross domestic product in the coming year – the highest level since 2009. This also includes subsidies for housing, digitization and mobility. Most of the corona aid is not included in the subsidy report, as it is expected to expire. The flood aid that has just been decided upon was also not included because it is considered temporary.