Tax estimate: The finance minister and his expectation management

Money doesn’t just fall out of the sky, says Finance Minister Lindner when it comes to tax estimates. The result confirms the FDP politician’s stance: There is little financial scope for the new federal budget.

The expression is serious, the words clear: “It is clear that the trees do not grow to the sky,” said the finance minister, referring to tax revenue. Three years ago. Similar five years ago. The man on the podium in the Finance Ministry who wanted to keep the money together was Olaf Scholz. The Chancellor knows the situation Christian Lindner is in today.

Lindner can also manage expectations: “The result of the tax estimate destroys the illusion of all those who may have suspected that the money would just fall from the sky,” said the FDP politician today. You can only make do with what is there. And he presented the new figures from the tax estimators for the 2025 budget: According to this, the federal government will have to make do with around eleven billion euros less than previously thought.

He has said this so far like a mantra, but now it is in black and white: “There is no new financial scope for the foreseeable future.” Some of his cabinet colleagues may have felt addressed by this. Several departments had reported much higher demand than Lindner had envisaged.

The Defensive lines are pulled

Development Minister Svenja Schulze, for example, has registered two billion more. The SPD politician said in the weekend that there had already been major cuts in the development sector ARD-Broadcast Report from Berlin and pointed out that development work is also important in terms of security policy: “We cannot withdraw from this responsibility if security in Germany is important to us.”

Interior Minister Nancy Faeser also argues that national security should make do with less money than before. And Defense Minister Boris Pistorius, who would like about ten percent more. So the defensive lines are drawn and the high stakes are emphasized.

However, Lindner now knows how to counter the security policy argument. “Fiscal resilience is also a category of security policy: Anyone who has reserves in the event of a crisis has made good provisions,” said the Finance Minister.

Someone has to give up

Lindner said he spoke to Pistorius today. However, the additional expenditure due to Russia’s war of aggression against Ukraine could not be a reason, for example, to make use of the exception clause in the debt brake. Lindner stands by: The money has to be enough, even if it is now less. But it should be distributed differently.

So someone has to do without – and just before an election year. This will not make the negotiations on the 2025 budget any easier, but rather will exacerbate the conflict. And Lindner started with that today. “We don’t accept certain individual plans as a basis for discussion.” That’s why he can’t say how much money is really missing from the budget. The announced plans are too high and deviate from the previous agreements, which is why he doesn’t expect them at all.

No relief at all Budget conflict

He has already indicated where the journey should go from Lindner’s point of view: In his opinion, there will be a zero round of citizens’ money in 2025 and social spending should not be expanded. A position that many people in the Chancellor’s SPD party will not like. Scholz himself said a few days ago that the limits had been agreed with him and that we now had to get it done together. However, he had so far remained silent about details and his savings preferences.

The tax estimators’ figures do not bring any relief in the budget conflict, but rather a new test of stress. This could last until July 3rd, then the cabinet should approve the budget. In the end, the three-person group made up of Chancellor Scholz and Vice Chancellors Robert Habeck and Lindner will have to decide the controversial points.

At least Scholz can certainly understand Lindner’s role, as he set the same goal around five years ago as Lindner does today, almost word for word. Namely: “That taxpayers’ money should be handled seriously and carefully.”