This is how much money jamaica can spend

This is how much money jamaica can spend

The monthly report
of the Federal Ministry of Finance is reading for experts. It contains many figures, tables and graphs – reading pleasure looks different. However, the Jamaica negotiators, who met for the first time in a large group on Friday, should be pleased with the current ie, because the magazine, which was published on the same day, contains good news. To be expected
"a dynamic continuation of the economic upswing in Germany," it says, for example. This means more jobs, higher corporate profits and more tax revenues. And that means more money to distribute.

Rarely has there been a good start to
Coalition negotiations as much money available as this year. Rarely, however, have the promises made by the parties involved been so expensive. If you add up all the plans and wishes that are in the election programs of the CDU, CSU, FDP and Greens, you easily end up with 100 billion euros. However, the future coalition partners only have a good 30 billion euros at their disposal – not for one year, but for all four years of the legislative period together. This is how much economic researchers, financial politicians and even the opposition estimate the financial reserves to be.

But this sum is a good starting point for calculations. The officials of Finance Minister Wolfgang Schauble (CDU) estimate that tax revenues will continue to flow well. The "robust" development up to and including September shows that companies expect good profits in the near future, he added. Next year, the absolute record number of 45 million people will be in work. Overall, the economic boom will last at least until the end of the election period: "The normal economic situation will be reached in 2022," the report says.

For Chancellery Minister Peter Altmaier, who is CDU leader Angela Merkel's right-hand man in the coalition negotiations and will also become acting finance minister on Tuesday, this was reason enough to raise hopes for tax reform: It was important "that we talk about how we can also reduce the tax burden, how we can give something back," he said at a trades event. There is financial leeway. Austerity programs are not necessary. Schauble's "success story" of a federal budget without new debts would be continued.

Greens find investments more important than tax cuts

Ralph Brinkhaus (CDU), the chief financial politician of the CDU/CSU parliamentary group in the Bundestag, also says: "We should not start the new election period with a fall from grace
and throw the 'black zero' overboard," he warned. A budget without new debts is important for future generations, but it is also a buffer for bad economic times: "This sets clear limits to new spending wishes."

This indicates the first lines of conflict, because Jurgen Trittin, one of the chief negotiators for the Greens, made it clear on Friday that for his party, investments have priority over tax relief: "We have to realize that every third bridge in Germany is dilapidated, that we have a 100 billion investment backlog in the municipalities" , he said on ARD. Investments are also needed in care, he says. Trittin could live with the "black zero", however. He warned against using short-term higher tax revenues for permanent spending. The CDU/CSU, the Greens and the FDP should first all "come down to earth on the financial facts". "That's where many a dream about fiscal ideas will burst," he said, referring above all to the FDP.

Liberals not only want to abolish solidarity surcharge in one fell swoop in 2019. That alone costs 18 billion a year. The FDP also wants to cut income tax by 30 to 40 billion euros by the end of the election period – an amount that would then be missing every year. Even within the CDU/CSU, these plans are considered impossible. The CDU and CSU are only aiming for 15 billion euros in tax relief, and the solidarity surcharge is to be reduced only gradually.

But the wish list is even longer: The CDU and CSU want to raise the child allowance to the basic allowance for adults. At the same time, child benefits are to be increased by 25 euros per child so that higher earners are not disadvantaged. This alone is likely to cost around six billion euros a year – not including the tax cuts.

But even if the four parties were to agree on a tax reform: Nothing will work without the states, because they are entitled to part of the revenue. It is therefore to be expected that the states will pay a high price for their agreement. It would not be the first time that the federal government has had to compensate for revenue shortfalls in the states.

Financial concessions in the area of education would be possible. All four parties agree that more money is urgently needed. The FDP has even made the ie a core demand. It wants each of the current eleven million schoolchildren in Germany to spend 1,000 euros on technology over the next five years. That would be two billion euros a year. The legal right to all-day care for schoolchildren, which the CDU/CSU wants to push through, will also cost an estimated two billion euros a year. For the then additional personnel would come once again scarcely three billion euro per year on top of it. For research funding
the Union will get tax losses of
about two billion euros – also per year.

The FDP and the Greens at least have an idea of how to get additional fresh money for all these projects: In order to accelerate the expansion of the network, in order to digitalize the administration, they propose selling the federal shares in Telekom and the post office. At current stock market prices, this would bring in around 20 billion euros. But the amount of this revenue is by no means certain and, above all, it would only be available once and then never again.

Not all of the plans of the potential coalition partners involve concrete costs. So also the expenditures for defense and development policy are to rise further noticeably. More is also to be paid for the police, the EU and generally for combating the causes of flight.

It will almost certainly also be expensive in the area of social welfare. Here, however, the promises of the parties are not so much at the expense of the children
of the state budget. In fact, the bulging coffers of the social security funds would be plundered. For example, the CSU – much to the chagrin of its sister party, the CDU – is still pushing for an extension of the maternity pension scheme. Women who had children before 1992 should get another year of parental leave
will be credited. To put them on an equal footing with younger mothers. This would cost the pension fund six to seven billion euros every year.

It should be clear that not all wishes can be fulfilled. In three weeks, the Jamaica negotiators will know exactly how much money they have at their disposal: That's when the official tax estimate for the next few years will be available.

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