Union calls for agricultural diesel to be phased out
Intermediaries significantly reduce the Growth Opportunities Act
February 9, 2024, 5:08 p.m
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With the Growth Opportunities Act, the traffic light wants to stimulate the economy. But states and municipalities are standing in the way because they are supposed to bear the majority of the tax losses. A compromise now provides for a lower burden – and cuts the project in half. A core element is also thrown out.
According to several traffic light representatives, the mediation group on the controversial Growth Opportunities Act has reached an extensive agreement with the Union. Accordingly, the relief volume for the economy should only amount to 3.2 billion euros per year, as three people familiar with the negotiations said. This means it is roughly halved and municipalities in particular are no longer burdened so heavily. They are expected to account for 555 million euros of the state’s expected shortfall in tax revenue, the federal government for almost 1.4 billion euros and the states for almost 1.3 billion euros.
According to reports, the planned bonus of 15 percent of the total amount for investments in climate protection measures was removed from the package. She was actually the centerpiece. Additional depreciation options are also planned for companies, including those involved in construction, and especially for small and medium-sized businesses.
The traffic light coalition made up of the SPD, Greens and FDP wants to use the tax relief to boost the sluggish economy. However, states and municipalities had criticized the fact that they should receive the majority of the shortfall in tax revenue. That’s why the draft law was blocked in the Bundesrat.
The Union put the traffic light representatives’ representation into perspective. “For the Union, an agreement on the Growth Opportunities Act is still subject to the continued validity of the agricultural diesel refund being discussed in the Mediation Committee and an agreement being reached,” said CDU politician Mathias Middelberg. This puts too much of a burden on farmers, and SPD-governed countries are also of this opinion.
The Mediation Committee of the Bundestag and Bundesrat is scheduled to deal with the Growth Opportunities Act on February 21st. The compromise could be formally approved there.
“We are very satisfied with the result,” said SPD financial politician Michael Schrodi. “Important growth impulses are coming for the economy.” At the same time, however, the municipalities would be burdened less than originally planned.
However, the federal government had originally planned tax relief through the Growth Opportunities Act amounting to around seven billion euros per year from 2024 and a total of over 32 billion euros in the next few years. The current level is considered to be far too low to provide real economic stimulus. Finance Minister Christian Lindner and Economics Minister Robert Habeck have recently described Germany as a location that is no longer competitive on several occasions. Tax cuts for companies are seen as a way to stimulate more private investment.