The chancellor wants to ease the financial burden on people in Germany in the face of rising energy prices and rising inflation. He is relying on proposals that have been circulating in the SPD not just since the Ukraine war and the consequences of the sanctions. The Social Democrats see the chance to finally find a majority for old proposals.
While the traffic light government is still discussing the contents of a possible third relief package for the citizens, it is already clear that the SPD is primarily concerned with social benefits for the poor, which they have had on their list for a long time: higher citizen income, such as Hartz IV will soon be mentioned, a housing benefit reform – both are points that SPD Chancellor Olaf Scholz has now announced as part of the relief package, but which have already played a role in the SPD’s election campaign. At that time there was no talk of the Ukraine war, gas shortages, nationalization of the utility companies and runaway inflation.
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Scholz and his Labor Minister Hubertus Heil (SPD) are aiming to increase the standard rates of the new so-called citizen’s income, which will replace Hartz IV from next year, by 40 to 50 euros, which the state currently has around 3.6 million Hartz IV recipients comparatively modest almost 200 million euros more.
In addition, the citizen’s income should be automatically adjusted to the price development. This is already happening with Hartz IV, but with a time delay, so that those affected do not benefit from it in good time. The FDP is not yet convinced of the project, the Federal Council must agree. So it looks as if the Chancellor’s proposal could still develop.
Scholz has also announced a “major housing benefit reform” and thus put an old SPD topic on the agenda To be able to fully pay for the costs of their roof over their heads. That was almost 620,000 households in 2020. The federal and state governments paid 1.3 billion euros for this. Due to sharply rising rents in the big cities, the number of housing benefit recipients had recently increased significantly by 22 percent. Scholz would like a dynamic flat-rate heating fee to supplement this housing allowance.
A third point that should play a role in the next relief package is an idea put forward by the Greens. Consumer Protection Minister Steffi Lemke has announced a kind of moratorium for those debtors who can no longer pay their electricity and gas bills. The tap shouldn’t be turned off immediately. Energy customers and tenants should benefit from this. Scholz wants to check that. Affected landlords who do not get their money could possibly receive an interest-free loan from KfW. However, how such a situation can be ended and a repayment organized has not yet been written.
Another point in the relief package III is the future of the nine-euro ticket. There is a dispute here. Finance Minister Christian Lindner pointed out that it was intended as a temporary measure and that there were no further funds for it in the federal budget. SPD co-leader Saskia Esken called on Transport Minister Volker Wissing (FDP) to quickly submit “a suitable proposal for the further development of the nine-euro ticket”. Wissing refers to the federal states, which together with the municipalities are responsible for local transport offers. However, the nine-euro ticket was a federal initiative that the federal states then implemented.
Lindner tweeted a higher commuter flat rate, and with it, as well as a protective shield for energy-intensive companies, brought FDP accents into the discussion about the relief package. How much that will cost and who will benefit is still completely undetermined. The Greens reject the commuter allowance as “unecological”. However, Lindner could implement his idea as part of horse trading – for example, if he agrees to an extension of the nine-euro ticket.
One thing is clear: there is still a need for discussion on all of the Chancellor’s proposals, nothing is finished. The fact that Scholz has already come out of cover is probably due to the fact that the state has to save the struggling energy company Uniper. The utility will now increase gas prices for consumers, despite agreements to the contrary with its customers. That affects many, and Scholz must therefore provide relief on the other side.
He also has an election ahead of him in Lower Saxony in October, in which the popular Prime Minister Stephan Weil will stand for the SPD again. The fact that elections could take place while the relief packages expire is an uncomfortable prospect for the governing parties. A federal budget, which is still well filled thanks to bubbling tax revenues, high credit authorization and the tendency to accommodate special expenses in shadow budgets, also speaks in favor of a speedy third relief package. Finance Minister Christian Lindner wants to use the debt brake again next year, which will then reduce the scope for special spending.
So it is that parts of the first two relief packages are not yet noticeable, but the third edition is already being discussed, with which the government is being accused by the opposition of taking the second step before the first, or actually: the third before the first and second.
The energy price flat rate, for example, will not be paid out until autumn, while the fuel discount and nine-euro ticket will run until the end of August. The higher employee allowance (1200 instead of 1000 euros), the increase in the basic allowance (10374 instead of 9744 euros) and the already increased commuter allowance from the 21st kilometer – all measures from the first relief package – only come with the tax refund from the citizens next year at the earliest.
The article “Hartz IV, housing benefit, gas moratorium: What the traffic lights are planning for the third relief package” comes from WirtschaftsKurier.
