Gradually they are all coming to Federal Finance Minister Christian Lindner (FDP) these days. The ministerial colleagues in the cabinet have to defend their spending requests for the federal budget for 2024 and the financial plan for the following years. Together they allegedly want 70 billion euros more than Lindner wants to give them. It’s a tough struggle.
At a question time in the Bundestag on Wednesday, Lindner once again made the cornerstones of the ongoing budget negotiations clear. The upper limit is currently at the expenses already set in the financial plan for 2024 last year – that was 424 billion euros. Only if the tax estimate in May raises the income expectations can there be an update “on the basis of this”.
And he made another point clear, namely the debt brake point. He doesn’t want to question that in 2024 either. “Yes, we comply with the constitution’s debt rule,” said the FDP leader. This will apply for the whole of 2024, should a new crisis not arise. So far, however, there is no evidence of this. Lindner did not give details of the ongoing talks within the federal government.
In principle, it is necessary to “balance the income and expenditure of this state,” he said. The government and parliament are called upon to “run budgetary policy again from the eyes of the children, who can also expect a functioning state.” It is a question of “securing children’s future” that “we do not permanently overwhelm the state in its financing options”.
Meanwhile, support for this line came from the President of the Federal Audit Office, Kay Scheller. “Future crises can only be mastered with sustainable state finances,” said Scheller in his function as Federal Commissioner for Efficiency in Administration. He warned of a loss of control over federal finances.
Scheller’s appeal to the traffic light coalition: Stable federal finances now require “clearer, smarter and also painful decisions”. He expressly encouraged the coalition partners to openly discuss the scarce funds. “The government and parliament have the responsibility to weigh up the conflicts and make decisions,” said Scheller. Instead of taking the easy route and putting those decisions about debt into the future.
Scheller, who once worked in the CDU/CSU parliamentary group in the Bundestag, said: “Permanently avoiding new debts ignores reality and ignores the interests of young people in particular generation,” he said. Especially those emergency loans that were taken out during the corona pandemic and the energy crisis would not only have to bear interest in the coming decades, but would also have to be repaid – and that for a very long time.
“A 13-year-old child who starts working at the age of 18 pays the repayment of those crisis loans that were taken out within three years with his taxes up to the age of 50,” Scheller calculated and pointed out that the federal government have earmarked a total of 850 billion euros in new debt over the past three years to deal with the crises. In the more than 70 years before that, the Federal Republic had totaled around 1,300 billion euros.
The Federal Court of Auditors demands that no new measures be decided without clarifying their long-term financing options. “If necessary, counter-financing must be provided by ending other measures. Projects that do not meet these requirements should be rejected without exception by the Federal Ministry of Finance when examining the proposals,” says the 16-page statement that the Federal Court of Auditors sent to the Federal Government.
The experts themselves made savings suggestions. That starts with the staff. A large number of the positions already approved are vacant. If this is the case on a permanent basis, then “specific cuts should be made”.
A different approach can be seen in the many voluntary federal funding programs. Too often “into the blue” is promoted. “The effect is often completely unclear,” said Scheller. Politicians provide money for energy research or forest protection, for example, without keeping track of what happens with the money. “We’re talking about amounts in the billions,” said Scheller.
The effect of many subsidies is also questionable. As an example, Scheller cited the proliferation of different VAT rates. Reform is urgently needed here. Although he admitted that it is difficult to remove individual perks.
In the case of cuts or deletions, significant political and social resistance from interest groups can be expected in each individual case. Therefore, across-the-board cuts should also be considered. He thinks the potential is huge. The largest support payments alone added up to 50 billion euros.
From the point of view of the Court of Auditors, the fundamental problem with preparing the budget for the coming year is the same as in previous years: only around ten percent of the volume of expenditure, i.e. a good 40 billion euros, can be shifted back and forth at all. 90 percent are more or less withdrawn from the householders because there are legal claims behind them, for example social benefits and personnel expenses. Interest payments are also non-negotiable items.
In order to increase the funds available, the Federal Court of Auditors also highlights the revenue side in its statement. Just relying on additional income with further economic growth is not enough. “If tax increases are politically ruled out, at least tax enforcement must be improved in order to strengthen the revenue base of the federal budget,” it says.
In particular, this concerns the consistent fight against tax evasion and tax avoidance. The experts refer in particular to the “structural deficits and implementation deficiencies in the sales tax, which is high in revenue and at the same time extremely susceptible to fraud”.
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