Climate money: Liberals criticize Heil’s proposal

The climate money for small and medium incomes proposed by Federal Labor Minister Hubertus Heil (SPD) is causing tension in the traffic light coalition.

The Liberals are critical. FDP parliamentary group leader Johannes Vogel opposed a staggering of climate money according to income bracket. “We have to give the income from the CO2 price back to the citizens as a climate dividend or climate money on a permanent basis. But we should do that as unbureaucratically as possible, for example with a per capita premium,” said Vogel of the “Bild am Sonntag”.

Those on low incomes would particularly benefit from this. FDP leader and Finance Minister Christian Lindner had previously said that he was looking forward to Heil’s financing ideas for climate money. A reform of the wage and income tax is much closer than new pots. “If salaries rise, the state must not earn disproportionately,” said Lindner.

Heil, on the other hand, received support from within its own ranks. “Hubertus Heil’s proposal is correct,” said Bernd Westphal, economic policy spokesman for the SPD parliamentary group, to the Handelsblatt. In the coalition agreement, the traffic light coalition agreed that the future price increase due to CO2 pricing should be compensated. “Therefore, climate money will now have to be introduced in addition to a social compensation mechanism in addition to the abolition of the EEG surcharge,” he said.

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In addition, funding programs that support the switch from fossil to renewable energies would have to be strengthened.

Heil wishes lasting relief to the citizens

The Verdi union welcomed the initiative in principle. “The climate money can finally provide relief that the previous packages cannot do,” said Verdi boss Frank Werneke. But it shouldn’t stay that way: all income from CO2 pricing would have to be returned to the citizens in full and the group of recipients would also have to be expanded to include service recipients.

Heil proposes permanently relieving the burden on people with low incomes because of the rising prices for energy and food. According to Heil, temporary measures are no longer sufficient.

Read more about rising prices and relief

The Minister of Labor referred to the goal of climate neutrality, regardless of the war in Ukraine. So energy is getting more expensive. “We have to give an answer that goes beyond the current relief package,” he said. This applies to everyone with low and middle incomes, such as employees, pensioners, students and trainees.

“For me as Minister for Social Affairs, it is important that we structure this climate money in a socially staggered manner,” said Heil. Those who need it most should get it most. “It should benefit people who earn less than 4,000 euros gross as single people and less than 8,000 euros gross per month as married people – i.e. those who have normal and low incomes.”

“We still have to talk about staggering and scope,” said Heil. “I want to bring this into the coalition because as Minister of Social Affairs I have a responsibility – even if the lead lies more with the Finance Minister and the Climate Minister.”
Furthermore, according to Heil, higher standard rates should apply as part of the new citizens’ allowance, which is to replace the current Hartz IV system from 2023. “My suggestion is that we take the bottom 30 instead of the bottom 20 percent of income as a basis for family households, for example.”

This means that more needs would be assumed when calculating the rates. “In this way we can achieve that the standard rates of citizen income per person and month will be around 40 to 50 euros higher than in the basic security system.”

Costs: tens of billions

Heil wants to introduce climate money and higher standard rates on January 1st. If this does not succeed with climate money, “we have to work with bridging one-off payments,” said Heil. Regarding the costs of both projects, the minister said: “We are still in model calculations, but we are already talking about amounts in the double-digit billions.”
FDP politicians are critical of higher rule rates. “Against the background of the coalition agreement, the proposal is surprising,” said Pascal Kober, spokesman for social policy for the FDP parliamentary group. The mandate from the coalition agreement to the Federal Minister of Labor is clear and unambiguous: “Instead of discussing standard rates, the additional income opportunities for Hartz IV recipients must be designed more fairly. Taking 80 cents from people with one hand from every euro they earn above the first 100 euros and then handing them a few more euros of social benefits with the other hand is a social policy that keeps people dependent on the welfare state instead of promoting them ‘ Kober said.

At the center of every Hartz IV reform should be improved chances of starting a career, he said. Heil will also have to explain to the coalition to what extent the financial burdens from energy costs and inflation are permanent and will not be offset by the existing annual Hartz IV increases.

Union criticizes “window policy”

From the Union’s point of view, Heil’s plans for the introduction of income-based climate money point in the wrong direction. “It is already foreseeable that the climate money will be a bureaucracy monster and cannot be implemented quickly enough to relieve people immediately and noticeably,” said Stephan Stracke, labor market policy spokesman for the Union faction in the Bundestag.

In addition, Heil recognizes with the plan that the previous relief packages are “completely inadequate”. “Heil has not given any answer about the amount of the planned relief. This is nothing more than window dressing. In addition, it is completely unclear whether pensioners and students should also be relieved,” said Stracke.

More: Traffic light fractions want to largely suspend Hartz IV sanctions by mid-2023.

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