As compared to the macroeconomic forecast, the tax revenue estimate will mean 10.5 billion euros less in tax revenue for federal government between now and 2023. Next year revenues are expected to be 1.6 billion euros lower, in 2021 2.8 billion euros lower, in 2022 2.7 billion euros lower and in 2023 3.4 billion euros lower.

Factored into budget planning

When considering the new tax revenue estimate it is important to know that the agreed tax reductions and the slowing of the economy were factored into the macroeconomic estimate for the 2020 budget and the financial plan for the period up to 2023 in March. The task now facing the Cabinet is thus a manageable one: the wishes of the different ministries will have to be brought into line with the changed conditions, explained Federal Finance Minister Olaf Scholz.

The downward correction to the expected additional tax revenue has been necessary as a result of uncertainties in world trade, said the minister, with trade conflicts and the Brexit debate responsible. These are resulting in a slowing of economic growth. The good news though, said Olaf Scholz, is that these "man-made problems" can be resolved. Economic growth can be expected to pick up again tangibly in the years to come.

Balanced budget still the yardstick

It is clear, Olaf Scholz continued, that Germany will ensure a balanced budget without new borrowing. What is now crucial, assuming good will on the part of all stakeholders, is to set the right priorities and to invest intelligently in the future and in the social cohesion of the country.