Criticism of the federal government's austerity package

Household - Criticism of the federal government's austerity package - changes possible

Criticism of the federal government's planned multi-billion euro austerity package shows no sign of abating. Associations and opposition politicians are complaining about cuts in the social sector. There could be movement on the highly controversial plans to abolish tax breaks for farmers.

Cabinet deals with details of the resolutions

The cabinet discussed the details of the agreement. Government spokesman Steffen Hebestreit spoke of painful cuts that would have to be made, however.

According to Hebestreit, individual bills should be passed by the cabinet in January. The budget committee of the Bundestag will then vote on the changes in mid-January. A budget week and the final budget resolution in the Bundestag are planned for the end of January. The budget could pass the Bundesrat at the beginning of February - changes are still possible in the parliamentary process.

Federal Chancellor Olaf Scholz(SPD), Vice Chancellor Robert Habeck (Greens) and Finance Minister Christian Lindner (FDP) agreed on savings in the 2024 budget a week ago after lengthy negotiations. Following the Karlsruhe budget ruling, they had to plug a financial gap of around 30 billion euros in the core budget and in the climate and transformation fund.

On Tuesday, the government announced further details of the plans - for example, the ticket tax for passenger flights is to increase. This means that the previously discussed introduction of a kerosene tax on domestic air traffic is off the table again. According to the government, the savings in the 2024 budget are to be achieved primarily by abolishing climate-damaging subsidies and reducing expenditure in individual departments, better integrating refugees into the labor market and reducing federal subsidies.

Movement on agricultural subsidies?

Recently, thousands of farmers in Berlin have been campaigning against the abolition of preferential rates for agricultural diesel and vehicle tax exemptions for agricultural vehicles. Agriculture Minister Cem Özdemir (Greens) is sticking to his rejection of these cost-cutting measures. Özdemir has repeatedly emphasized this position and nothing has changed in this respect, said a spokesperson.

In view of the wave of protests in the agricultural sector, several voices had already been raised from the ranks of the SPD, Greens and FDP parties to discuss alternatives. SPD parliamentary group deputy Dirk Wiese spoke of a possible solution for small farms in the "Bild" newspaper. "A cap could make sense for agricultural diesel, because small farms with areas of up to 100 hectares are under particular pressure." A cap could relate to a certain amount of diesel.

Farmers' president Joachim Rukwied once again called for the plans to be stopped. "Anyone who so massively offends an entire sector and rural areas should not be surprised by escalating resistance." If the proposals are not withdrawn, protests will continue and escalate in January. A cap would also be unacceptable.

Development Ministry speaks of painful cuts

According to the government, spending on Germany's international engagement is to be reduced by a total of 800 million euros. Accordingly, the Federal Foreign Office and the Ministry of Economic Affairs and Climate Protection are to each bear an amount of 200 million euros and the Federal Ministry for Economic Development and Cooperation 400 million euros.

"The cuts are very painful and will be felt in many areas," said a spokesperson for Development Minister Svenja Schulze (SPD). The department is currently working on implementing the savings decision. "In view of the global situation, Germany should actually be investing more funds in international cooperation, not less. Development cooperation is not a nice-to-have, but in our German interest. After all, Germany's prosperity depends on having partners around the world and working together."

Criticism: savings are anti-social

The German Social Association was "deeply disappointed" by the agreement on the budget. Chairwoman Michaela Engelmeier said: "In a time of global crises, it is essential that the state increases its investments instead of making savings in the social sector." A reform of the debt brake and an increase in taxes for the super-rich are urgently needed.

While industry would benefit from a reduction in electricity tax, consumers would be additionally burdened by rising CO2 prices, said Engelmeier. "Reaching into the pension insurance reserves in the course of cutting the federal subsidy for pension insurance by 600 million euros counteracts statements that pension insurance must be set up in a way that is fair to all generations." Engelmeier was particularly concerned about the planned abolition of bonus payments in the citizen's allowance for further training.

Janine Wissler, Chairwoman of the Left Party, said: "What the traffic light cabinet is putting under people's Christmas trees is an imposition. Almost three billion is to come from the pots for the unemployed, refugees and pensions at a time when price increases are a burden for many and more and more people no longer know how to pay their bills." There would be enough money if we were prepared to tax corporations and the super-rich more heavily.

AfD parliamentary group leader Alice Weidel criticized: "The coalition wants to make cuts primarily where it affects citizens and the top performers in society: farmers, pensioners, the manufacturing industry and air travelers."