2024 draft budget passes federal cabinet
According to the Federal Government, a decision by the Bundestag on the budget is planned for the end of January 2024. The Bundesrat could follow suit on February 2. Until then, the provisional budget will apply.
One of the items to be cut concerns international aid payments, which are to be reduced by a total of 800 million euros. Around 380 million euros in savings are to be achieved through cuts in the budget of the Federal Ministry of Transport. The statutory pension insurance scheme is to receive 600 million euros less in federal subsidies in the coming year.
Savings are also to be made in the defense sector. The Bundeswehr is to finance some of its weapons purchases not via the regular budget, but via the special Bundeswehr fund; this concerns the weapons that the Bundeswehr has to buy because it has given weapons from its own stocks to Ukraine.
The largest savings item relates to expenditure from the Climate and Transformation Fund, which will be reduced by 12.7 billion euros. The CO2 levy on heating oil, gas and fuel will rise from 40 cents per tonne of CO2 to 45 cents at the turn of the year. The air traffic tax on airline tickets is to be increased.
The controversial abolition of subsidies for farmers is to take place - such as the motor vehicle tax for agricultural vehicles and the abolition of tax concessions for agricultural diesel. Together, this is expected to bring in around 920 million euros.
A ruling by the Federal Constitutional Court in mid-November caused a double-digit billion euro hole in the budget for 2024. Following this, Federal Chancellor Olaf Scholz (SPD), Vice Chancellor Robert Habeck (Greens) and Finance Minister Christian Lindner (FDP) held intensive discussions in an attempt to find a solution. They finally announced an agreement last Wednesday. This contains numerous measures.
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The 2024 draft budget, containing significant cuts and savings, was approved by the Federal Cabinet. This includes reducing international aid payments by 800 million euros and cutting 380 million euros from the budget of the federal ministry of transportation. The Federal Minister of Transport will explore alternative funding sources for weapons purchases. The statutory pension insurance scheme will receive 600 million euros less in federal subsidies. The Coalition leadership is seeking savings in the defense sector, with the Federal Armed Forces financing some weapon purchases through a special fund. A nominal increase in the air traffic tax and the CO2 levy on heating oil, gas, and fuel are also part of the savings measures. The controversial abolition of agricultural subsidies is expected to generate over 920 million euros in savings, while a ruling by the Federal Constitutional Court has created a budget deficit. The Federal Council and the Bundestag will review and approve the revised budget before its implementation in 2024.
Source: www.stern.de
