Finance Minister Christian Lindner wanted to present the cornerstones of the budget for 2024, but the traffic light coalition is discussing over 70 billion. A part could be financed if the government cuts climate-damaging subsidies.
More money for the Bundeswehr, for basic child security or other projects in the coalition agreement? The traffic light is discussing over 70 billion for the 2024 budget. Now, in view of this dispute, the chairwoman of the Council of Experts on Economic Development, Monika Schnitzer, has called for state benefits to be abolished. In particular, it should be about climate-damaging subsidies, Schnitzer told the “Welt” (Tuesday). These weighed on the budget and delayed the transition to a carbon-neutral economy, she said.
Budget could save billions through fewer climate-damaging subsidies
“Specifically, the abolition of tax breaks for kerosene and for international flights, the tax break for diesel and the tax break for privately used company cars over private cars should be considered,” Schnitzer told the newspaper. The Council of Experts is also critical of the distance allowance from a climate perspective. The largest items in the subsidies listed are the tax breaks for diesel at eight billion euros, as well as for kerosene (also eight billion euros) and the distance allowance (six billion euros).
Overall, Schnitzer sees a savings volume of around 30 billion euros per year through the reduction of climate-damaging benefits. The Federal Environment Agency even speaks of up to 65 billion euros that could be saved. Another low double-digit billion amount could be saved in the social sector, for example by limiting future increases in mothers’ pensions, she said. Schnitzer has been a member of the Expert Council since April 2020, as a so-called economic expert, and has chaired the committee that also advises the federal government since October 2022.
Habeck also talks about the reduction of climate-damaging subsidies
The director of the Institute of German Economics (IW), Michael Hüther, spoke to “Welt” in favor of a comprehensive reduction in subsidies. “One subsidy that can be phased out fairly quickly would be the fuel tax exemption for domestic aviation,” he said. “The tax break for diesel fuel also needs to be reconsidered,” he said. The same applies to the preferential treatment for natural gas-powered vehicles. Federal Minister of Economics Robert Habeck is said to have suggested similar measures.
Federal Finance Minister Christian Lindner (FDP) actually wanted to present the key points of the 2024 federal budget this week. However, he postponed this indefinitely last week. His ministerial colleagues had announced additional requests of 70 billion euros.
Sources: with agencies dpa and AFP