Less bureaucracy and more investment: "traffic light" agrees growth package
Federal Chancellor Olaf Scholz (SPD) announced the long-term reduction of the electricity tax to the minimum allowed in the EU. The so-called electricity price compensation, which particularly energy-intensive business sectors benefit from, will be extended until 2030. "Both measures will result in billions of savings for the German economy," Scholz said.
Companies will also profit from the extension of the so-called depreciation allowance until 2028. "Investments can therefore be claimed tax-deductible more quickly," the Federal Chancellor added. Economy Minister Robert Habeck also announced a special incentive for electric cars. He hopes it will provide an "impulse" for the automobile industry. "This can benefit the climate, and the German automobile industry can benefit from it as well."
The President of the German Industry and Trade Chamber, Peter Adrian, welcomed the expansion of tax incentives and the initiative as a whole. However, he criticized the energy price decisions as falling short. "The competitive disadvantages for the German economy due to energy prices remain a significant investment barrier," he stated.
Federal Finance Minister Christian Lindner (FDP) announced that the labor shortage would be addressed with tax incentives for foreign skilled workers. They will receive a tax reduction of initially 30, then 20, and finally 10 percent in the first three years of their employment in Germany. In addition, it is planned to make it easier for asylum seekers to take up work.
Experts like economist Veronika Grimm and economist Sebastian Dullien from the Hans-Böckler-Foundation welcomed these announcements. "In general, it should be made easier for newcomers to take up employment," Grimm told the "Augsburger Allgemeine."
Dirk Jandura from the Foreign Trade Association spoke of a "bold step." Criticism came, however, from the AfD: Tax incentives for foreigners are a "slap in the face of hardworking German employees," explained Bundestag member Leif-Erik Holm.
Lindner also announced incentives for overtime work. Employees who work beyond the statutory retirement age will receive the employer's contribution for social security, "so a clear incentive to work longer," the Finance Minister said. Overtime should also be tax- and contribution-free. The Association of Family-Owned Businesses warned that new bureaucracy or misuse could pose a threat in this area.
The coalition also expects economic impulses from changes to the controversial Supply Chain Act. Two-thirds of the companies will no longer fall under the German regulations for respecting human rights and environmental standards along their supply chains, according to Lindner. The implementation of the European Supply Chain Act will also be delayed as much as possible. Applause for this came, for example, from the Retail Trade Association HDE.
Employer President Rainer Dulger welcomed the coalition agreement and the economic package as "signs of life for the coalition." Recognizable priorities are also apparent. However, "announcements are not laws," and the submission of the package just before the beginning of the summer break speaks "not for a quick implementation." Tanja Gönner, CEO of the Federation of German Industries, expressed similar sentiments.
- The Federal Government's climate measures include an extension of the investment tax advantage for energy-intensive sectors.
- Investment in climate-friendly technologies could potentially benefit from the tax incentives announced by Christian Lindner.
- The IHK president praised the expansion of tax incentives, but expressed concerns about the impact of energy price decisions on German competitiveness.
- The growth package announced by the 'traffic light' coalition includes measures to encourage electric car investments.
- The 'Growth package' also includes tax reductions for foreign skilled workers, aiming to address the labor shortage.
- The SPD, FDP, and Green Party coalition has announced plans to simplify bureaucratic processes related to overtime work, offering tax and contribution benefits.
- Criticisms of the economic stimulus package have come from the far-right AfD, who view the tax incentives for foreigners as unfair to German workers.
- The FDP's Peter Adrian highlighted the need to address long-term energy price concerns in addition to short-term tax incentives.
- The EU Supply Chain Act is set to undergo changes, which could result in less stringent regulations for two-thirds of German companies.
- The FDP finance minister announced incentives for workers to continue working past retirement age, with tax and social security benefits.
- Veronika Grimm, an economist, supports the coalition's employment-related announcements, emphasizing the importance of making employment more accessible to newcomers.
