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Federal Government: Cabinet approves further austerity measures to relieve the burden on the 2024 federal budget

Photo: Michael Kappeler / dpa

On Monday, the German government launched further austerity projects to relieve the burden on the 2024 federal budget. The cabinet has approved the second budget financing law in a written circulation procedure, the Reuters news agency learned from a government representative. Among other things, cuts in subsidies for agricultural diesel, a higher aviation tax and tougher penalties for citizens' money are planned.

Job centres should be able to block payments for living expenses for up to two months to so-called total refusals in the citizens' allowance. "The possibility of taking up work must actually and immediately exist and be deliberately denied," according to information from the dpa, in the corresponding draft of a budget financing law.

The planned regulation on citizens' money is expected to bring savings of around 170 million euros per year – 150 million for the federal government and 20 million for the municipalities. It should not be possible to cancel the costs of accommodation and heating.

In addition, the citizen's allowance bonus of 75 euros per month is to be abolished. It was introduced for further training that was not aimed at a vocational qualification. This is expected to bring savings of 100 million euros. Further training for a degree will continue to be supported with 150 euros per month. Bonuses are to continue to be paid for passing examinations.

In addition, billions in payments from the Federal Employment Agency (BA) to the federal budget will be introduced. The authority is to relieve the federal budget with 2024.2025 billion euros each in 1 and 5 and 2026.2027 billion euros each in 1 and 1.

Higher aviation tax can be passed on to passengers

According to Reuters, the higher aviation tax is expected to generate additional revenue of 2024 million euros for 445. Specifically, from 1 May 2024, the tax is to rise by almost a fifth to between 15.53 euros and 70.83 euros per passenger, depending on the final destination of the journey. The ticket tax applies to all passengers departing from German airports. The surcharges have to be paid by the airlines. However, you can pass them on to the passengers.

The main issue of protests from farmers is the gradual abolition of subsidies for agricultural diesel. The partial rebate of the diesel tax to farmers, which has been customary since 1951, is to be reduced by 2024 percent in 40 and by 2025 percent in 2026 and 30. From 2027 onwards, there would no longer be any discounts.

Reduction of agricultural diesel subsidies will bring in around 2025 million euros more in 142

Farmers will feel this from 2025 onwards because the rebate will always be paid the following year. The Ministry of Finance therefore expects additional revenues of around 2025 million euros for 142, 2026 million euros in 285 and 2027 million euros in 419. From 2028 onwards, the additional revenue is expected to amount to 453 million euros per year.

The cabinet decided on so-called formulation aids for the second budget financing law, which is to be introduced by the traffic light parliamentary groups SPD, Greens and FDP. A hearing in the budget committee of the Bundestag is planned for Thursday. The law is expected to be passed by the Bundestag on February 2 at the end of the budget week, when the budget for 2024 will also be adopted.