The Ministry of Finance intends to follow a strict budgetary course in the coming years. Expenditure and measures must be prioritized, potential savings identified and implemented, according to Minister Christian Lindner (FDP). Despite consolidation measures, there is a budgetary “need for action” totaling 14.4 billion euros in the years 2025 to 2027. So this money needs to be saved.
The federal government had struggled for a long time to draw up the federal budget for 2024. This is now to be adopted by the cabinet on Wednesday. According to the draft, expenditure should drop significantly to 445.7 billion euros. With a view to the corona pandemic and the energy crisis, it was said that after the additional spending caused by the crisis, there should be a return to “normal” financial policy.
The new debt is expected to be 16.6 billion euros in 2024. This is intended to comply with the debt brake enshrined in the Basic Law. It was possible to close a coverage gap of 20 billion euros in the draft, according to the Ministry of Finance. But one cannot speak of a “string concert”. Originally, the departments would have had significantly higher spending requests.
The task areas of defence, digitization and climate protection would have priority in the next few years, it said. At the same time, with a view to social spending, for example, it was said that more and more funds were tied up and the scope was becoming smaller and smaller.
Two billion euros are estimated for 2025 to finance the planned basic child security. That is significantly less than the twelve billion euros that Family Minister Lisa Paus (Greens) had demanded. In the coalition, there is still a need for clarification on basic child security.
Changes in parental allowance planned
In the course of the austerity course in the federal budget, there could be changes in parental allowance. Specifically, the income limit up to which there is an entitlement to parental allowance is to be significantly reduced, as the Ministry of Finance said on Monday about the draft budget for 2024. This limit is currently 300,000 euros for taxable annual income for couples and 250,000 euros for single parents. The ministry said that the spending dynamics for parental allowance should be dampened. This is done in accordance with the Ministry of Family Affairs. The parental benefit compensates for a lack of income when parents look after their child after the birth.
As the “Spiegel” writes, in the future only parents with an annual income of up to 150,000 euros should be entitled to parental allowance. Family Minister Lisa Paus (Greens) is following guidelines from the Federal Ministry of Finance. According to this, expenditure in 2024 should fall by 290 million euros to almost 8 billion euros compared to this year. Initially, cuts in parental benefits were also discussed, the magazine writes. However, the Paus Ministry was able to avoid this by restricting the circle of those entitled.
