As of: March 23, 2024, 5:04 a.m
By: Max Schäfer
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The federal government is spending more money on subsidies than ever before - despite the budget gap.
The taxpayers' association and the opposition see potential for savings.
Berlin – The traffic light coalition started with ambitious goals in the areas of climate protection, energy transition and digitalization, but crises such as the war in Ukraine and its consequences quickly affected the work.
The government wanted to help itself in terms of budgetary policy with a network of special funds, but the Federal Constitutional Court accepted the budgetary tricks.
Savings are necessary.
Nevertheless, according to the latest subsidy report, the traffic light plans to set a new record for financial aid in 2024.
Year |
Estimated financial aid from the federal government in billions of euros |
Federal tax relief in billions of euros |
|---|---|---|
2021 |
24.3 |
19.5 |
2022 |
30.7 |
21.5 |
2023 |
45.2 |
20.7 |
2024 |
48.7 |
18.4 |
Source: Federal Ministry of Finance |
Traffic light coalition wants to pay out record amount of subsidies despite budget gap
Despite the budget gap of around 20 billion euros, the federal government wants to provide a new record amount of subsidies of 48.7 billion euros.
This is how much is listed in the most recent subsidy report.
However, that is from September 2023, i.e. before the budget ruling of the Federal Constitutional Court and the subsequent budget deliberations of the coalition partners.
Compared to the financial aid actually paid out of 18.4 billion euros, the amount is more than twice as high.
However, not all federal funding ends up in the subsidy report.
According to a report in the Handelsblatt,
no one in the federal government has an overall overview of all ongoing federal funding programs and the respective amounts
.
Finance Minister Christian Lindner (left) and Economics Minister Robert Habeck are the focus of the debate about subsidies during the budget crisis.
(Archive photo) © Michael Kappeler/dpa
The funding database of the Federal Ministry of Economics is intended to provide an overview.
It lists funding programs from the EU, the federal government and the federal states.
There are no municipal projects there.
A total of 2,360 programs are listed in the database.
387 of these are attributable to the federal government and 54 to the EU.
The states provide funding for 1919 funding programs.
A wide range of subsidies creates a thicket of bureaucracy
A network of bureaucracy has emerged around the numerous federal subsidies.
According to Handelsblatt,
1,400 awarding bodies manage
the funding.
These include federal offices, investment banks and project sponsors.
One example is the Kreditanstalt für reconstruction (KfW), which manages the federal building child benefit, for example.
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KfW has created an infrastructure for the funding programs.
Each funding program has its own IT capacities, call centers for queries as well as accounting and project development.
How many employees are involved is “difficult to say,” a spokesman told
Handelsblatt
.
Taxpayers' Association criticizes complex guidelines for federal funding programs
The bureaucracy behind the federal government's funding measures is a point of criticism from the Taxpayers' Association.
“Many funding guidelines are so complex that many municipalities cannot shoulder the application, processing, verification and testing process.”
Each ministry only has its own funding programs in mind and uses its administration.
As a result, “opportunities for economical management would be missed,” the
Handelsblatt
quoted the Taxpayers’ Association as saying.
The demand is: “The federal funding framework must be made more efficient by bundling, streamlining and shortening.” The taxpayers' association has also presented a savings plan to the traffic light.
Another point of criticism of the federal government's subsidy policy is that it goes far beyond its responsibility.
“Almost all ministries provided funding directly in the municipalities,”
Handelsblatt
quoted the Taxpayers’ Association as saying.
“The funding amounts run into the billions of euros.”
CDU wants to radically reform federal subsidies and strengthen states
There is also criticism of the federal funding programs from the opposition.
Some funding also comes from the Union's government.
Nevertheless, the CDU now wants to initiate a reform and create a lean state that alone sets the regulatory framework instead of educating citizens “with subsidies or tax discounts,” Philipp Amthor told the Handelsblatt.
Lower Saxony's CDU leader Sebastian Lechner called for states and municipalities to share more in tax revenue.
“More personal responsibility, a move away from the funding aristocracy and efficient state control are crucial steps.”
The Federal Audit Office also criticizes the traffic light coalition's subsidy policy
At the beginning of its term in office, the traffic light coalition called for subsidies in the form of tax breaks to be withdrawn.
In fact, according to the subsidy report, these are expected to fall to a new low of 18.4 billion euros in 2024.
After an interim high of 21.5 billion euros, this is also less than the 19.5 billion in 2021.
The Federal Audit Office nevertheless accused the traffic light of breaking its word.
The federal government is sticking to “inefficient tax breaks”.
(ms)