Budget policy: Lindner and his Ministry of Finance in distress – economy

Budget policy: Lindner and his Ministry of Finance in distress – economy

The Federal Minister of Finance has said that the preparation of the next budget will not be a walk in the park Christian Lindner (FDP) already made clear in December. At that time he wrote to the chairmen of the traffic light groups that one should not harbor any illusions. The 2024 budget will be a “disproportionately larger political task” than the previous one. Now, two months later, the negotiations are under way – and the difficulties are there.

“It’s amazing what cuts are planned there,” says a traffic light housekeeper of the SZ, referring, for example, to the budgets of the Foreign Office or the Development Ministry. Despite the Ukraine crisis and global hunger, billions are to be cut there. That is not acceptable. There were also threats of large gaps in the climate and transformation fund. Minister of Health Karl Lauterbach (SPD) recently announced a billion dollar financial requirement for his care reform.

In fact, however, the financial plan for 2024 only provides for expenditure of just under 424 billion euros; this year it will be a good 476 billion. And while this year 40.5 billion euros will flow into the budget from reserves, there are only 7.7 billion left for next year. For 2024, the Ministry of Finance also expects 12.3 billion euros in new debt. For comparison: This year it is 45.6 billion – albeit including some loans that do not count towards the debt brake. In addition: After Lindner has resorted to special budgets for the electricity and gas price brake and the Bundeswehr, his inclination to repeat this for the coming financial year should be extremely low.

The financial plan forms the upper limit for the individual plans of the departments, it is said

Discussions are currently underway for the key budget figures that the cabinet is to decide on March 15th. Negotiations are still going on at state secretary level. If it gets stuck, the ministers have to do it. At the beginning of mid-January, Lindner’s budget state secretary had calculated for his departmental colleagues that there was already a billion-dollar deficit. The presentation for the meeting shows that the Ministry of Finance is expecting additional tax revenue of 16 billion euros – but that this is offset by 31 billion euros for projects that are not yet shown in the previous financial plan. These include citizen income and the housing benefit reform, compensation for cold progression, refugee and local transport aid for the federal states – and twelve billion euros more for increased interest rates and higher personnel costs. Because the ministry expects an additional debt margin of three billion euros on the credit side, there would ultimately be a gap of twelve billion euros.

According to the presentation, the financial plan constitutes the “absolute upper limit” for the individual budgets of the departments. And: “In the meantime, additional burdens are to be financed from the existing financial plan approaches.” Which means that for new projects that cost money, departments would have to redeploy their own budgets.

From ministry circles it is said that the collective bargaining round in the public sector at federal and local level still entails a major financial risk. If the wage agreement is high, federal personnel costs will rise sharply. No provision has been made for this case; The departments would also have to manage this by reallocating and prioritizing. Basic child security is also not yet priced into the financial plan up to 2026. While the FDP sees this primarily as a bundling of services, Family Minister Lisa Paus (Greens) is definitely planning to expand services. The Ministry of Finance, however, considers large new benefit laws that cost a lot of money to be difficult to present – unless another cost item is eliminated. The tax estimate in May will bring more clarity.

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