Relief package: who benefits – and how quickly?

The new relief package had been eagerly awaited. Whether it is as “massive” as announced, who benefits how quickly and how fairly the relief is distributed is analyzed Kirsten Girchick.

Finance Minister Christian Lindner had announced that the relief package should be “powerful”. At least in terms of volume, it is. Only yesterday there was speculation as to whether it would be more or less than ten billion euros – now it is clear that it is 65 billion euros. That sounds like a lot, but the debt brake should be adhered to again in the coming year. The relief should be targeted and fair and take effect quickly.

How fast does the package work?

At least the energy price flat rate for pensioners – on December 1st everyone gets 300 euros each, via the pension insurance it runs quickly and unbureaucratically.

It will be more difficult for students – they should get 200 euros, but the payment method still has to be found together with the countries.

Only at the beginning of 2023 will they be opposed child benefit and child allowance increased, that citizen money introduced and that housing benefit reformed so that more people are entitled to it and rising heating costs are permanently cushioned. This wait could be very long for many people.

It could take even longer for the relief of increasing energy prices. A discounted one basic need for heat should first be discussed by a commission of experts.

In the case of electricity, this should have a Electricity price brake go: Private households and small and medium-sized companies should pay a discounted price for their basic consumption of electricity. But that should only come when a part of the profits of the electricity companies is skimmed off by the so-called “revenue cap”.

Is the excess profit tax coming after all?

“Revenue ceiling” – that’s the excess profit tax with another name. “Skimming off chance profits,” as traffic light officials called it, sounds better. However, the federal government now wants to wait for a possible solution at European level before intervening in the electricity market design itself. She is hoping for a legally secure solution outside of the tax system. But by then, many households and smaller businesses could run out of air.

How fair is the package?

Finance Minister Lindner advertises on Twitter that a family of four with an income of 31,000 euros will be relieved of 1,500 euros, with 66,000 euros it is only 1,000 euros. The measures would also reach the “working middle”. Lindner’s calculations are not immediately comprehensible.

Criticism continues to be sparked by the fact that it is above all the upper income groups who benefit from the adjustment of the income tax rate to inflation. The relief for low wages by raising the midi job limit to 2000 euros, a rough estimate will bring in a maximum of 50 euros per month. And the increase in child benefit, for example, is fully offset against the standard rate for Hartz IV recipients, so it does not bring any relief.

Many consider the continuation of the 9-euro ticket at a price of 49 to 69 euros to be too expensive for people on low incomes.

How effective will the package be?

The institute for macroeconomics and economic research, which is close to the trade unions, assumes that the increased energy prices will burden Germany by around 200 billion euros in 2023. This is money that businesses and consumers cannot spend on consumption or investments. The 65 billion euro package would absorb at least part of this lack of demand, so that the economy is supported.

How are companies helped?

smaller companies should be relieved with the electricity price brake. energy-intensive companies will be relieved with 1.7 billion euros. In addition, there should be more guarantees and KfW help and simplifications in insolvency law should be created. However, medium-sized companies criticize the fact that there is no short-term emergency aid for companies that are threatened with their existence.

What about climate protection?

the increase in the carbon price is postponed, which causes criticism from climate protectors. The plans for electricity or gas price caps are also criticized by climate protectionists and business representatives alike – because the price is the most important incentive to save energy.