Roland Dürre
Wednesday June 9th, 2010

Austerity Package

I will not write anything on the austerity package as such. To me, it seems all a little arbitrary and highhanded. And in all probability, it will be neither sufficient nor effective. Again, we have one of those unfortunate packages consisting nothing but lame compromises.

Introducing the “traffic fee” as part of the “austerity package”, in particular, seems like a cheat to me.

It starts with the “ecological fee” for flight passengers departing from Germany. The additional 14 Euros per departure (that is what Munich Airport expects, since nobody knows for sure) will basically be another unpleasant addition to the ticket price to Thailand and simply cause some extra bureaucracy.

We already have financial administration. So why don’t they, at long last, introduce the added value tax on kerosene? If necessary, what about an additional “ecological tax”? Why should I pay extra when placing my not-quite-100-kilogram-body on board a plane, but not for 100 kilograms of freight?

Not to mention the forced dividend for the railway. The “Deutsche Bahn AG” is supposed to pay a total of 500 million Euros every year to the state. Of course, this will either limit its future capacity for investment, or else its capacity for reducing debt. But how does our government know the “Bahn AG” will make anything like a regular profit during the next few years? And would it not make sense to invest in the railway in the present situation?

Both, the air-traffic fee and the forced railway dividend are a significant part of the austerity package. Except that they do not really have anything to do with saving money …

RMD

(Translated by EG)

1 Kommentar zu “Austerity Package”

  1. Chris Wood (Thursday June 10th, 2010)

    I think we can all agree that laws in Germany, particularly tax laws are full of silly little illogicalities, causing unfairness and wasted effort in managing them. Part of this involves how income and expenditure is divided up among different levels in the state hierarchy (nation, regions and communes). In the following, I lump them all together.
    But Roland, savings are made possible either by reducing spending, or by increasing income.
    Businessmen and their organisations almost all demand reduced spending by the state, (rather than increases in tax and other state income). There are some good reasons for this. State enterprises contribute little to export, which is vital for us. State enterprises are often seen to work less efficiently. Their workers, particularly civil servants (“Beamten”) often are protected from the risk of job loss for bad work. These workers may be undeservedly rewarded, due to networking together with politicians.
    Banking is an interesting case, where investment banks have made a mess, while state banks have done even worse.
    But there are counter examples, where privatisation has worsened value for money in some services. And a lot of state work could hardly be left to private firms; for instance control of private firms.
    A large part of state expenditure is help for people who cannot well help themselves, such as unemployed and pensioners. Nobody wants to see people starving in a rich country, or to see increased expenditure on keeping the poor from grabbing more.
    So how much of the economy should be private? In the western democracies this seems to have landed at about 50%, which is probably about right. Sweden had to back off from a higher proportion.

    Lastly two comments on particular suggested social savings:
    It seems right that unemployed should not get “parent money”. This was intended to reduce loss of income due to having children, (which does not apply to the unemployed). This seems to have been a silly mistake in the original parent-money law.
    It seems wrong to take away “heating money” from the unemployed. It would be bad enough simply to reduce unemployment money. But at least such a change would hit all equally. The only reason I can see for this idea is very cynical. In June, cold winter is far enough away, that people do not think so much about the need for heating!

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