Weekly happenings in the German federal parliament, Bundestag
Germany's 2023 Budget: A Comprehensive Relief Package and Investment in Future
The 2023 federal budget of Germany is set to provide significant relief to citizens and the economy, with an estimated total cost of around €30 billion. This relief package aims to address the challenges posed by high energy prices and provide support during a period of global energy market disruptions.
Relief for Citizens and the Economy
Key measures in the relief package include a temporary fuel tax cut, reducing gasoline by 30 cents and diesel by 14 cents per liter for three months. Households will also receive a one-time payment of €300, and child support will increase by €100. Public transport fares will be reduced to €9 per month, and subsidies for low-income households will be provided to ease energy cost burdens.
To further support families, the child benefit for all children will be increased to 250 euros per month each. Commuters will also benefit from increased allowances, and the EEG surcharge, a levy supporting renewable energy, has been eliminated since July 2023, benefiting a typical family of four by about €300 annually.
Energy Efficiency and Renewables
The budget also focuses on advancing energy efficiency and a shift toward renewables. A new subsidy program will be introduced to replace gas boilers with heat pumps. Energy efficiency standards for new buildings will be raised to KfW55 by 2023, and from 2024, heating systems installed will be required to use at least 65% renewable energy.
The budget also supports increased biogas production and the retrofitting of particle filters for construction machinery in the next two years. Germany is investing over 58 billion euros in its alliance and defense capabilities, with a focus on green and digital technologies.
Investment in Infrastructure and Education
Urban development funding will remain at 790 million euros for the renovation and development of cities and communities in the coming year. An additional 200 million euros were made available for the federal special program for the "Adaptation of urban spaces to climate change" (Park program).
In the field of education, the federal government is investing over 2.7 billion euros for BAföG (German Federal Education Grants) in 2023. Professional education and training facilities will have 38 million euros at their disposal for the coming year.
Support for Innovation and Research
Researchers can rely on secure funding in Germany due to the agreed increases in the Pact for Research and Innovation. An additional 20.5 million euros from the parliamentary procedure will be invested in industrial research for companies in 2023. The video game industry will receive an additional 21 million euros for the Games Funding Program in 2023.
International Support
Germany and its international partners will provide military, financial, diplomatic, and humanitarian support to Ukraine. The funds for the German National Tourist Board (DZT) will increase by over 6 million euros to a total of over 40.6 million euros. The funds will be used for combating hunger, providing humanitarian aid, supporting civil crisis prevention, and financing the resettlement program for people at risk in Afghanistan.
Social Reforms and Housing
The citizen's allowance, the permanent increase in child benefit, and assistance with heating costs are now included in the budget. Funds for housing benefit will increase by 2.2 billion euros to 2.9 billion euros for the new "Wohngeld Plus" that takes effect in January. An additional over 10 billion euros will be provided for the federal government's share of housing and heating benefits.
The budget also includes investments in the construction and housing sector, with an increase of over 2.3 billion euros secured for 2023. A total of 14.5 billion euros will be provided for social housing over the next few years. The federal government is investing over 353 million euros in reducing costs in rail freight transport and promoting the introduction of the Digital Automatic Coupling (DAC).
Support for Small and Medium-Sized Enterprises (SMEs)
An additional 23 million euros will be invested in the conversion to the GSM-R radio system for reliable train radio and better mobile phone reception in trains. An additional 700 million euros will be available for the central innovation program for SMEs (ZIM) in 2023. A total of 27.5 million euros will be provided by the federal government for skilled workforce development for small and medium-sized enterprises.
Investment in Digitalization and Climate Change
An additional 103.8 million euros will be provided in the next year for digitalizing rail. An additional 1.5 billion euros will be mobilized for the budget of the Federal Ministry of Digital Affairs and Transport. An additional 86 million euros will be invested in nationwide broadband expansion.
The federal government is providing 200 million euros for a coordinating office for promoting clinical studies in children and young people. The federal government is also taking loans amounting to 45.6 billion euros for this purpose. The federal government's draft budget for 2023 now foresees expenditures of 476.3 billion euros.
Conclusion
The 2023 federal budget of Germany reflects a commitment to providing relief to citizens and the economy amidst high energy prices, while also investing in the country's future, particularly in areas such as infrastructure, education, innovation, and the transition to renewable energy. The budget aims to balance immediate relief with long-term goals, ensuring a sustainable and resilient future for Germany.
[1] Source: Bundesregierung.de [5] Source: Bundesregierung.de
- The budget dedicated over 58 billion euros to Germany's alliance and defense capabilities, with a focus on green and digital technologies, showcasing the investment in future technology sectors within the finance industry.
- The introduction of a new subsidy program will provide incentives for households to replace gas boilers with heat pumps, indicating support for the health-and-wellness industry and the push towards energy efficiency and renewables.
- Researchers in the science sector can expect secure funding due to the agreed increases in the Pact for Research and Innovation, with additional investments made in industrial research for companies and the video game industry, furthering the growth of the finance and industry sectors.
