Draft budget approved: Scholz defends parental allowance reduction and budget course

Chancellor Olaf Scholz has defended the planned reduction in parental benefits for high-income families.

Draft budget approved: Scholz defends parental allowance reduction and budget course

Chancellor Olaf Scholz has defended the planned reduction in parental benefits for high-income families. During the government survey in the Bundestag, the SPD politician said of the current income limit of 300,000 euros a year: "That's a lot." But the core remains that more parents should be encouraged to have children. CSU MP Dorothee Bär asked Scholz about the plans and complained that the planned innovations would make women more dependent on their husbands.

The plans are part of the federal budget for 2024, which was decided by the cabinet on Wednesday, as the German Press Agency learned from government circles. In it, federal spending will be reduced to 445.7 billion euros from 476.3 billion euros this year. After the crisis-related additional spending in previous years, the debt brake anchored in the Basic Law is to be observed again.

Scholz justified the budget restructuring course with savings. The budget is of course challenged by the fact that many have "got used to the large dimensions" associated with the fight against the corona pandemic and cushioning the consequences of the Ukraine war. "But it is now also clear that we will now set up budgets again that do not try to fight crises with these additional credit-financed funds." Scholz named defense, the transition to climate neutrality and social cohesion as budget priorities.

"In Germany, three million children are growing up in poverty"

Trade unions and the social association VdK sharply criticize the savings, especially in the social sector. "A cutback course is basically unnecessary, tends to be antisocial and harmful to economic policy," said DGB board member Stefan Körzell of the German Press Agency. The government is sending the wrong signal with the budget. Cuts directly depressed domestic demand and economic output. "In view of the current, precarious economic situation, this is counterproductive in terms of economic policy."

VdK President Verena Bentele told the "Augsburger Allgemeine": "A strong welfare state is the foundation of our society, we must not allow it to begin to crumble and break." She called for improvements, especially in the areas of the planned basic child security and the subsidies for health and long-term care insurance. "In Germany, three million children are growing up in poverty."

The fact that savings should also be made on care or parental allowance is "neither sensible nor considered," said IG Metall chairman Jörg Hofmann, according to a statement. "The traffic light got itself into this situation because it rules out tax increases and, in a year marked by war and inflation, the debt brake was activated again for 2023 - that took away the necessary leeway after the crisis." Körzell was even clearer: "The debt brake is a brake on the future," he criticized.

Instead, the DGB board called for additional government spending and "massive investments" in areas such as transport, infrastructure and digitization. "Hundreds of billions are being invested in future investments in China and the USA. If Germany slows down here, it will lose touch for a long time."

Subsidy for long-term care insurance is eliminated

As a savings contribution, a subsidy of one billion euros for long-term care insurance, which was only introduced in 2022, will no longer be included in the budget. Federal Minister of Health Karl Lauterbach (SPD) immediately made it clear that there would be no cuts in benefits. Bentele criticized that the subsidy provided for statutory health insurance was also lower than in 2023 and was therefore too low. Union parliamentary group leader Mathias Middelberg (CDU), who in turn considers the cuts to be less attractive, told the "Neue Osnabrücker Zeitung": "In fact, the minimal "savings" are often just a matter of shifting the burden to the social security funds."

support from employers

Support for the federal government's budget plans comes from business. Employer President Rainer Dulger told the German Press Agency: "The Federal Minister of Finance's consolidation course is correct. We also need sustainability in financial policy. We support the traffic light government in this effort." Dulger spoke of a powerful signal of stability in view of the current uncertainties on the international financial markets.

At the same time, the Employers' President called for a cap on contributions to the social security systems. "We need a brake on social security and a clear roadmap for limiting contribution rates to below 40 percent again," he said.