That was really hard work

Today, the Federal Cabinet is set to approve the budget proposal of the Traffic Light Coalition. Afterward, it will be discussed in the Bundestag. Federal Labor Minister Heil spoke about this on "Markus Lanz," stating that he reluctantly accepts certain parts of the compromise.

"It was really hard work." This is the summary of Federal Labor Minister Hubertus Heil regarding the budget negotiations of the Traffic Light Coalition. However, the draft for the Federal Budget 2025 is now complete. Today morning, the cabinet intends to approve it. Afterward, it will be discussed in the Bundestag. The final decision is expected at the end of the year.

Originally, it was supposed to be a spending cut. However, only one ministry must make do with less money, and that is the Ministry of Federal Transport Infrastructure, led by Federal Transport Minister Geywitz. Federal Labor Minister Hubertus Heil has more funds at his disposal, but he must save on citizen's allowances: 4.7 billion Euro. Specifically, he can allocate 29.7 billion Euro for benefit payments this year, while next year it will be 25 billion. This year's expenses are higher due to a deteriorating labor market situation and an increased number of refugees with entitlement to social benefits, according to the Federal Government. Heil intends to save on citizen's allowances primarily by having more people in employment.

The budget negotiations were challenging for several reasons, according to SPD politician Heil in an interview with Markus Lanz on ZDF on Tuesday evening. There was the war in Ukraine, with Germany being the second-largest provider of military and economic support to the country. Germany is also experiencing a recession. "And we have three parties, each with different ideas," Heil described the coalition dispute over the budget, which almost led to a breakdown. The Traffic Light Coalition has proven that it can solve problems and find compromises, Heil added about the Growth Package. "So, there are things in this economic paper that I find great and right because we have economic dynamism, like the Secure Jobs Act. There are things that are a classic compromise. And there are things that I don't like so much. But it's then a political overall assessment, to get something like that for the country."

Less taxes for skilled immigrants?

What Heil didn't like was the idea of taxing skilled immigrants less for a certain period. The opposition shares this criticism. Tax relief is not the top priority for foreign laborers coming to Germany as skilled workers, Heil says. "They ask me: How quickly can I get a visa, where can I find a housing, how is the professional recognition, and do I feel good in the country?" Not all these questions can be answered positively: bureaucracy in visa processing exists, and the housing shortage is overwhelming. Perhaps a financial comfort blanket could positively influence the decision to come to Germany. However, Heil says: "I don't find that the best idea in this paper." Yes, one should carefully consider the proposals from FDP leader Lindner on this matter. "But I have a question, and I'm not convinced."

Criticize the guests at Lanz, who withdraws largely from the discussion, on the insufficient distance between the height of the citizen's income and the wages of low-income earners. "I cannot ignore this feeling as Labor Minister," says Heil. But the facts are different," he explains. The minimum wage has been increasing significantly since 2015, while the level of citizen's benefits has not changed. "We must ensure that work pays off. But it pays off in every case," he adds. The nuts and bolts to be turned are the minimum wage and collective bargaining.

Approximately 800,000 people are employed but still require social benefits. Indirectly, Heil advocates for a further increase in the minimum wage. Furthermore, he mentions that sanctions for social benefit recipients will be increased if they fail to meet their obligations in job seeking. Public contracts of the federal government should only be awarded to companies that pay "decently according to tariffs."

And then there's the matter of black work. Heil: "We have a lot of people who work BAT, which means cash in hand, and receive social benefits. I think it's right that we look for them, as there is a specific sanction provision for this." The goal of citizen's income must be to bring people into employment. Heil is committed to this goal, as he states.

What the Minister does not say: The financial planning of Finance Minister Lindner still has gaps. According to Union faction vice Matthias Middelberg, there is a gap of 17 billion Euro. Other experts speak of less than ten billion. However, the fact is that it exists. And how it can be closed remains completely unclear.

Hubertus Heil, the Federal Labor Minister, spoke about the budget negotiations on Markus Lanz's show, expressing his reluctant acceptance of certain compromises made by the Federal government in the draft of the budget proposal.
As part of the budget proposal, the Federal Labor Ministry has been allocated more funds, but Heil must save on citizen's allowances, with a reduction of 4.7 billion Euro in benefit payments this year and 25 billion Euro next year.
In response to proposals from FDP leader Lindner to tax skilled immigrants less, Minister Heil expressed reservations, noting that other issues, such as visa processing and housing, are more important concerns for these immigrants.
Hubertus Heil has advocated for several measures to help address the issue of people requiring social benefits while being employed, including increasing the minimum wage, imposing sanctions for social benefit recipients, and awarding public contracts to companies that pay decent wages.