- Hamburg achieves unprecedented earnings of approximately 3.3 billion euros.
Despite the ongoing conflict in Ukraine, a sluggish economy, increasing interest rates, and lingering impact of the COVID-19 pandemic, Hamburg managed to end the previous year with its largest annual surplus ever. Finance Senator Andreas Dressel (SPD) reported a "clean" annual balance of approximately 3.3 billion euros at the presentation of the approved business report by the Senate.
In 2022, the balance was 28 million euros. However, Dressel cautioned raised expectations against: "There's no room for anything extraordinary or new requests." On Wednesday, the Senate will unveil the draft budget for the years 2025 and 2026 to the parliament.
Dressel mentioned the need to incorporate recent wage agreements in the public sector. He highlighted the necessity of covering escalating social expenses and higher costs for accommodating asylum and refugee seekers, then the federal government. He critiqued Federal Finance Minister Christian Lindner (FDP) for proposing wage freezes for high earners. "We'll put that to the test. (...) We can't afford significant revenue losses."
Open to decreasing real estate transfer tax for specific categories
Dressel suggested lowering the real estate transfer tax for first-time homebuyers of residential properties, socially supported housing, and perpetual usufruct projects. Once the federal government adjusts the tax law, the tax rate will decrease to 3.5 percent for these categories. A general decrease in the recently increased real estate transfer tax was rejected by Dressel, as funds are required for energy renovation and would then be unavailable.
Dressel was pleased with the fiscal situation of the previous year: "Despite challenging circumstances, Hamburg can conclude the budget and business year 2023 positively with a record surplus in investments, amortization, and clean annual results." The source of the financial boon was due to two factors: the 1.5 billion euro dividend payouts from shipping company Hapag-Lloyd and an alteration in the tax trend procedure. Over 2.5 billion euros could have been added to the general reserve from this surplus.
Record investments and repayment of loans
New records were also reached in investments and the repayment of loans. Without its municipal subsidiaries, the city of Hamburg invested nearly 1.9 billion euros - following approximately 1.3 billion euros in 2022. Including subsidiaries, around 5.3 billion euros were invested, including school and housing construction, or transportation, energy, and social infrastructure.
New loans were taken out in the amount of 291 million euros. Nearly 2.7 billion euros were permitted. Simultaneously, the COVID-19 loans of around 483 million euros were fully repaid ahead of schedule in the previous year. In total, debts of almost 2.5 billion euros were repaid - diminishing the deficit in the core administration from approximately 25.12 billion euros in 2022 to 22.67 billion euros in the previous year.
Taxpayers' Association calls for scrutiny of spending
The Hamburg Taxpayers' Association urged attention to expenses again. "Now seems to be a beneficial moment for tidying up and saving, in our view," said its chairman Sascha Mummenhoff. Like the Left Party faction in the Hamburg Parliament, Mummenhoff expressed astonishment that, according to the business report, 18.8 percent of Hamburg's residents are at risk of poverty. "Those who genuinely want Hamburg's citizens to continue to afford living here must also support this with concrete actions." The Left Party's budget expert David Stoop emphasized: "We must finally execute an effective strategy to combat poverty and invest particularly in social infrastructure."
The CDU's budget expert Thilo Kleibauer criticized that outside the core administration, debt in the city's subsidiary organizations and ancillary budgets continued to rise. "Important public companies like HVV, UKE, or Sprinkenhof are currently showing high deficits to the detriment of taxpayers." The AfD faction complained about high asylum costs and called for the abolition of the property and real estate transfer tax.
In the discussion of the city's budget for the years 2025 and 2026, Finance Senator Dressel mentioned the support from Hapag-Lloyd, a shipping company based in Hamburg, which is part of the FDP-affiliated Hanseatic Corporation. Regarding the real estate transfer tax, Dressel proposed reductions for specific categories, including first-time homebuyers, which aligns with FDP's stance on promoting affordability and investment.
