The federal cabinet approves the government draft for the federal budget for 2024. There are 30 billion euros less to spend. There is sharp criticism from trade unions and the social association.
The federal cabinet has approved the government draft for the federal budget for 2024. The German press agency learned this from government circles.
The federal government had struggled for a long time to draw up the budget. According to the draft, expenditure should drop significantly to 445.7 billion euros. After the crisis-related additional spending in previous years due to the corona pandemic and the energy price crisis, an austerity course is now to be embarked on. The new debt is expected to be 16.6 billion euros in 2024. This is intended to comply with the debt brake enshrined in the Basic Law.
“In Germany, three million children are growing up in poverty”
Trade unions and the social association VdK sharply criticize the savings, especially in the social sector. “A cutback course is basically unnecessary, tends to be antisocial and harmful to economic policy,” said DGB board member Stefan Körzell of the German Press Agency. The government is sending the wrong signal with the budget. Cuts directly depressed domestic demand and economic output. “In view of the current, precarious economic situation, this is counterproductive in terms of economic policy.”
VdK President Verena Bentele told the “Augsburger Allgemeine”: “A strong welfare state is the foundation of our society, we must not allow it to begin to crumble and break.” She called for improvements, especially in the areas of the planned basic child security and the subsidies for health and long-term care insurance. “In Germany, three million children are growing up in poverty.”
The fact that savings should also be made on care or parental allowance is “neither sensible nor considered,” said IG Metall chairman Jörg Hofmann, according to a statement. “The traffic light got itself into this situation because it rules out tax increases and, in a year marked by war and inflation, the debt brake was activated again for 2023 – that took away the necessary leeway after the crisis.” Körzell was even clearer: “The debt brake is a brake on the future,” he criticized.
Family Ministry has to cut back on parental allowance
Instead, the DGB board called for additional government spending and “massive investments” in areas such as transport, infrastructure and digitization. “Hundreds of billions are being invested in future investments in China and the USA. If Germany slows down here, it will lose touch for a long time.”
After long and difficult negotiations, the federal cabinet wants to adopt the government draft for the federal budget for 2024 this Wednesday. Federal spending is to be reduced significantly to EUR 445.7 billion after EUR 476.3 billion this year. After additional spending in previous years due to Corona and the energy price crisis, the debt brake anchored in the Basic Law should be observed again. The cabinet also approves the financial plan until 2027.
The Family Ministry has to cut back on the largest item in the budget, parental allowance. Top earners should no longer receive the wage replacement benefit, only parents who together earn no more than 150,000 euros a year. Previously, this limit was 300,000 euros. Minister Lisa Paus (Greens) has not yet been able to push through with the desired sum of twelve billion euros for the planned basic child security, Finance Minister Christian Lindner (FDP) has initially only set two billion euros for 2025 as a “placeholder” in the further financial plan.
Subsidy for long-term care insurance is eliminated
As a savings contribution, a subsidy of one billion euros for long-term care insurance, which was only introduced in 2022, will no longer be included in the budget. Federal Minister of Health Karl Lauterbach (SPD) immediately made it clear that there would be no cuts in benefits. Bentele criticized that the subsidy provided for statutory health insurance was also lower than in 2023 and was therefore too low. Union parliamentary group leader Mathias Middelberg (CDU), who in turn considers the cuts to be less attractive, told the “Neue Osnabrücker Zeitung”: “In fact, the minimal “savings” are often just a matter of shifting the burden to the social security funds.”
support from employers
Support for the federal government’s budget plans comes from business. Employer President Rainer Dulger told the German Press Agency: “The Federal Minister of Finance’s consolidation course is correct. We also need sustainability in financial policy. We support the traffic light government in this effort.” Dulger spoke of a powerful signal of stability in view of the current uncertainties on the international financial markets.
At the same time, the Employers’ President called for a cap on contributions to the social security systems. “We need a brake on social security and a clear roadmap for limiting contribution rates to below 40 percent again,” he said.
Source: Stern
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