Budget for 2019 authorised by German parliament

26 Nov 2018

calculator and moneyOn Friday, Germany’s lower house of parliament authorised a budget that is set to increase planned spending for the coming year to €356.4 billion – marking a €13 billion rise over 2018.

The decision, which followed three days of debate, was approved after a vote of 366-284 with no abstentions.

Dw.com reports that due to a rising tax revenue, the coalition government of Chancellor Angela Merkel, which is made up of the Christian Democratic Union, its Bavarian sister party the CSU, and the Social Democrats (SPD), intends to not make use of new net borrowing for a sixth year running. This is known as the “schwarze Null” (“black zero”) and has previously fallen under scrutiny for being implemented at the cost of investment in education, housing and public infrastructure.

The budget will direct the largest portion of money, €145.3 billion, to the labour and social sector – partly in the form of pension payments.  

More money will be dedicated towards social welfare, families, defence and development aid, and changes to tax brackets will be implemented as means of compensating for inflation.

Families will receive €10 more for child allowance, an amount added to the current €1940-€200 per month – depending on how many children are brought up.

The budget has faced criticism from some. As the daily Rheinische Post reports, the Free Democrats (FDP) accused the welfare spending fraction in the budget of being too large of an amount, however requested that €181 million more will be dedicated towards aiding disadvantaged children.

Meanwhile, the Green Party pointed out a shortage of climate-protection measures and the Left Party criticised a lack of consideration towards Germany’s poorer residents.

Conservatives had requested to completely terminate the solidarity surcharge, although this was dismissed by Finance Minister Olaf Scholz from the SPD. The coalition agree to abolish the tax for 90% of those who are paying it – resulting in tax losses of €10 billion. Scholz said that seeing as the remaining 10% of taxpayers contained some of the highest earners in the country, exempting them too would decrease tax revenue by a further €10 billion, as dw.com reports.