The federal government plans to spend 362 billion euros next year – more than ever before. And that, without incurring any new debt. The opposition accuses the government of trickery.
More money for daycare centres, more housing subsidies and higher expenditure on climate protection and defence: With the votes of the Grand Coalition, the Bundestag has approved the budget for the coming year. It provides for expenditures of 362 billion euros – more than ever before. 371 MPs voted for the budget, 270 against and none abstained.
Compared to the current year, spending has icreased by 5.6 billion euros. Among other things, the Grand Coalition wants to spend more money on social matters, environmental and climate protection, railways and the digitalisation of schools. Despite the weakened economy and less strongly rising tax revenues, Finance Minister Olaf Scholz (SPD) presented a budget that doesn’t require new debt.
“Randomised budget policy”
Green member of parliament Tobias Lindner accused the coalition of trickery. This is because the federal government has less tax revenue than money it wants to spend. The numbers only add up because Scholz is taking 10.63 billion euros out of one of the savings boxes in the budget – a reserve that the federal government had set aside after the refugee crisis. Scholz is also counting with five billion that he expects will not be spent in the end anyway. “This has nothing to do with a balanced budget”, Lindner accused him of. “It’s random budget policy, pure chaos.”
The Greens, the Left and several economic institutes are calling for the dogma of balanced budgets to be loosened: In view of the low interest rates, the federal government could borrow money cheaply and invest more. “There is no serious economist left who says that balanced budgets are a good idea,” said Die Linke MP Gesine Lötzsch.
Record investments planned
Scholz defended his budget: “The federal government is expanding its investments massively. It’s a little irritating that some people always put that aside quickly in order to come up with new ways of making more debt.”
In fact, the Grand Coalition is planning record investments of 42.9 billion in the coming year – for the expansion and extension of roads or railways, for new cycle paths, new daycare centres, digital schools or fast mobile communications, especially in rural areas. However, the criticism is that many funds have not been used at all because planning capacities are lacking and the construction industry is working at its limit capacity.
Rejection by the opposition
The German government also wants to implement the first resolutions of the climate package: subsidy programmes for the replacement of old oil heating systems or more charging points for electric cars, for example. In addition, VAT on long-distance train tickets is to be reduced – but the Bundesrat slowed down this project for now. The Upper Chamber decided to appeal to the mediation committee, in which the Bundestag and Bundesrat now have to look for compromises. The equally controversial CO2 price for fossil fuels, on the other hand, will not start until 2021.
The opposition rejected the budget for various reasons. FDP politician Stefan Ruppert complained that the federal government always speaks of investments, but never of relief for citizens. Lötzsch complained that the steps taken to save the climate were too small. In addition, the federal government was putting far too much money into the Bundeswehr and too little into questions of the future. The AfD budget expert Peter Boehringer stressed that Scholz was taking high risks with billions of euros in the budget, for which he had not created any reserves.
Good timing for the finance minister
For the Minister of Finance, however, the budget decision comes at just the right time. At midnight, the vote on the new leadership of the SPD will expire – tomorrow the SPD will choose the winner. Scholz and his partner Klara Geywitz will compete against former NRW Finance Minister Norbert Walter-Borjans and Bundestag member Saskia Esken. The dispute is also about the future of the Grand Coalition. At a party conference next week, the SPD wants to decide whether to stay in or not.
Vice-Chancellor Scholz spoke out in favour of continuing the coalition: “The budget will contribute to enabling the government to continue its work consistently next year. Next year, the Grand Coalition will tackle important issues such as a reform of fixed-term employment contracts. I think we should do this for the progress in our country and for its future.”