German parliament overturns subsidies for agricultural diesel
- 02 Feb 2024 11:40 am CET
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The German parliament has approved the controversial abolition of tax relief on agricultural diesel. On Friday, parliament passed the Budget Financing Act, which includes the gradual abolition.
Before it can come into force, the law still has to pass the Bundesrat. However, the state chamber did not agree to a shortened deadline on Friday and did not deal with it. The law will now first be discussed in specialist committees in the Bundesrat. The next regular session of the Bundesrat is scheduled for March 22.
The planned cuts led to a wave of protests by farmers, some of whom marched with their tractors as far as Berlin in front of the Brandenburg Gate.
The Bundesrat does not have to approve the law, but could lodge an objection and appeal to the mediation committee. Many federal states have coalition governments with traffic light parties. If a state government is in disagreement, the state must abstain in the Bundesrat or cannot give its consent.
The President of the German Farmers' Association, Joachim Rukwied, said on Thursday: "It is a clear signal that the federal states are putting the brakes on the federal government's budget law. The time gained must now be used sensibly and solutions must be found in the interests of agriculture. The tax increase on agricultural diesel must be taken off the table."
With the Budget Financing Act, the coalition is implementing austerity measures. Following a budget ruling by the Federal Constitutional Court, billions had to be plugged. The government had decided against the originally planned abolition of the motor vehicle tax exemption for agriculture. At the same time, the coalition of SPD, Greens and FDP had agreed that the abolition of tax breaks for agricultural diesel would take place gradually and not suddenly.
Until now, companies have been able to receive a partial refund of the energy tax on diesel - with a refund of 21.48 cents per liter. This is to be gradually reduced. There will no longer be any subsidies for quantities consumed in 2026.
The Budget Financing Act also includes a higher ticket tax on passenger flights. In addition, a tightening of sanctions for citizens' benefits is limited to two years. Job centers are allowed to cancel the citizen's allowance for the unemployed for a maximum of two months if those affected repeatedly refuse to accept reasonable jobs. In addition, the citizen's allowance bonus of 75 euros per month will be abolished - it was introduced for further training that is not aimed at a vocational qualification.