Federal Finance Minister Christian Lindner (FDP) has contradicted a report in the “Bild” newspaper, according to which he had prevented Chancellor Olaf Scholz (SPD) from presenting a new aid program for low earners. Lindner wrote on “Twitter” that “the opposite is the case”. Among other things, he proposes a higher basic allowance and a fair wage and income tax rate for 2023. The plan is compatible with the debt brake.
Furthermore, Lindner held out the prospect of a tax cut for the coming year due to the high prices. It’s about low earners, but also the “working middle,” said the FDP politician on Monday in Berlin. By abolishing the so-called cold progression, they should be relieved. Cold progression is a kind of creeping tax hike, when a pay rise is eaten up by inflation but still results in higher taxation.
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The “Bild” newspaper had previously reported that Scholz wanted to present a spending package worth around five billion euros on Friday and referred to coalition groups. However, Lindner opposed the plans, after which Scholz was unable to provide any specific information about new aid.
Lindner would therefore have wanted to prevent additional spending next year with a view to the debt brake. According to the report, the finance minister argued that there was hardly any further scope for additional spending in the federal budget.
The FDP boss had already made a similar statement at the weekend. “We will and will have to operate within the framework set by the constitution,” said Lindner of the German Press Agency.
“Some are speculating that there will be another exception to the debt brake,” he said. “Behind this lies the misunderstanding that one could then finance general political projects and wishes. But that is legally impossible.”.
The debt brake, which has been enshrined in the Basic Law since 2011, aims to ensure that federal and state budgets get by without income from loans. For the federal government, net borrowing is limited to 0.35 percent of gross domestic product.
In “extraordinary emergency situations”, however, the Bundestag can suspend the debt brake, as in 2021 and 2022 due to the Corona crisis.
On Friday, in view of the exploding energy prices, Chancellor Scholz held out the prospect of further relief for citizens for the beginning of next year, but this should primarily take place as part of a housing benefit reform. In addition, a protective shield for defaulting rent and electricity or gas customers is under discussion. In mid-September, politics, business and trade unions want to discuss further steps.
