Budget: Lindner confident despite tax slump

Budget: Lindner confident despite tax slump

The tax estimate does not make the debate about the 2025 budget any easier. Nevertheless, the finance minister expects the budget to be approved in July. The SPD leader points to red lines.

Despite the tax estimate being revised significantly downwards, Federal Finance Minister Christian Lindner (FDP) is confident that the 2025 federal budget can be passed by the cabinet in July. “However, there is still a lot of work to be done before then,” said the FDP leader on ZDF.

He assured that the new forecast, according to which the federal, state and local governments will collect significantly less taxes next year than expected, does not come as a surprise. “That was to be expected in this magnitude. And that is also what was planned.”

Lindner insists on austerity measures

Lindner reiterated that the priorities were clear. Germany must do more for “hard security”, get the economy going again and invest in education and technology. “That means: Other things are less important.” It is of central importance to limit the increase in social spending and to readjust international politics.

Lindner pointed out that Chancellor Olaf Scholz (SPD) had stood by his side at the beginning of the week and called on the departments to save money. “That’s why I have no doubt that we will decide on the budget together in the right way.”

SPD leader Lars Klingbeil confirmed that the pension cuts proposed by the FDP were out of the question for his party. “Anyone who continues to believe that we can shoulder the necessary investments in our economy, in jobs or the Bundeswehr by now cutting pensions for citizens should take out the calculator again,” said Klingbeil in an interview with the German press -Agency. “This is not only politically wrong, but also mathematically impossible.”

Thuringia’s Prime Minister Bodo Ramelow (Left Party) also sharply criticized Lindner for the proposal. “Instead of constantly making the pension system worse and messing it up, it should finally be made future-proof and strengthening society,” said Ramelow to the German Press Agency in Erfurt. Lindner wants to replace a generational contract with a pact with the stock exchange and thus “shift life-long insurance into the speculative and profitable economy.”

Ramelow is promoting the introduction of citizens’ insurance. “Everyone pays in, from every type of income. That would finally be a contribution to intergenerational equality and it would be an anchor of social stability,” he said and demanded that civil servants and members of parliament should also pay into the pension fund in the future. “In this way, we could overcome divisions in society and create more common ground instead of putting contributors in fear and terror.”

Significantly lower tax revenue

The tax estimators came to the conclusion yesterday that the federal, state and local governments will receive 995.2 billion euros in the coming year – 21.9 billion euros less than expected in the fall. Lindner then again criticized the “exorbitant” spending requests from the cabinet and emphasized that there would be no financial leeway in the foreseeable future. His party recently called for the abolition of the zero-deduction pension at the age of 63 after 45 years of employment in order to save money.

Klingbeil emphasized that the tax estimate had once again made it clear how great the challenges were for preparing the federal budget. Everyone must be prepared to approach each other – and the SPD is too. But his party wants to make the country economically strong and modernize it without cutting pensions or saving on security. “It’s about what is necessary for our country now. I’m sure the Chancellor will clarify this with the Economics and Finance Minister,” said Klingbeil.

Household marathon

Klingbeil expressed the expectation “that now we won’t just work with Excel tables and cut things out, but that the focus will always be on: How can we keep this country strong?” In view of the challenges created by the war in Ukraine, he expressly supported the demands of the SPD ministers Boris Pistorius (defense), Nancy Faeser (interior affairs) and Svenja Schulze (development).

Austerity measures should “not come at the expense of our security or the security of Ukrainians,” emphasized Klingbeil. That’s why it’s just right that Pistorius “is now demanding significantly more money for the Bundeswehr. And he has my full backing.”

Klingbeil did not say how he felt about the Defense Minister’s proposal to exclude security concerns from the debt brake. “How the government does this and what options there are must now be discussed within the cabinet,” he simply said. However, Klingbeil emphasized that there should be no delays in drawing up the budget. “There needs to be a budget that goes through cabinet before the summer.” The decision is planned for the beginning of July.

Source: Stern

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