Majority in favor of growth package – but no real agreement
Published: Wednesday, Feb 21st 2024, 22:50
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In the struggle for a growth package for companies, the traffic light coalition has increased the pressure on the CDU/CSU. The mediation committee of the Bundesrat and Bundestag did not reach a real agreement on Wednesday evening. However, the committee adopted a negotiation result on the Growth Opportunities Act with the votes of the traffic light majority. As the CDU/CSU did not agree, there will now be a showdown in the Bundesrat on March 22. The controversial law will then be voted on again.
The "traffic light" government has promised to hold further talks with the agricultural sector on easing the burden, said Bundesrat President Manuela Schwesig after the end of the consultations in Berlin. The CDU/CSU had linked its approval of the law to the traffic light government withdrawing the abolition of the agricultural diesel. CSU state group leader Alexander Dobrindt said that he had no confidence that the traffic light would present substantial relief for agriculture by March 22.
The Bundesrat had blocked the growth package with the argument that the federal states and local authorities would have to shoulder a large proportion of the costs and tax losses. In initial talks, the negotiating partners then reduced the volume of relief from the originally planned seven billion euros per year to 3.2 billion euros. Basically, all that remained was a light version of the original plans. A premium for investments in climate protection, which was originally considered to be the core of the law, has also already been scrapped.
SPD-led states were satisfied with the slimmed-down solution, but the CDU/CSU made an additional condition for their approval: the SPD, Greens and FDP would have to renounce the abolition of the tax concession on agricultural diesel for farmers already decided by the Bundestag. While coalition politicians criticized that the two issues had nothing to do with each other, CDU/CSU politicians argued that both were about burdens on the economy.
An opportunity had been missed, said Dobrindt after the negotiations. One part of the economy, namely agriculture, could not be burdened. The opportunity to build a bridge had been missed. He expressly regretted this.
The Growth Opportunities Act provides for a series of tax breaks for companies and an acceleration of approval procedures. Among other things, better tax write-off options are intended to boost the crisis-ridden residential construction sector. A so-called declining balance depreciation is to be introduced to promote investments. The special depreciation allowance for small and medium-sized enterprises is to be substantially improved. Research and development by companies is also to receive greater tax incentives.
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