Budget for 2027: The key points are set

The German cabinet has approved the draft budget for next year. The skilled trades sector is disappointed and criticizes what it considers insufficient tax relief for small and medium-sized enterprises (SMEs).

The Federal government The government has adopted the key figures for the federal budget for the coming year and the financial plan up to 2030. Plans include "record investments for new growth, more jobs, and the modernization of Germany" and "fundamental reforms" to make Germany fairer, the economy more competitive, and the social systems more efficient. At the same time, the CDU/CSU-SPD coalition intends to pursue a "strict consolidation course." "Our top priority is to secure jobs, create new ones, and ensure economic growth," said Finance Minister Lars Klingbeil (SPD).

The federal budget includes €543,3 billion in spending. New borrowing is projected to increase by €12,8 billion to €110,8 billion in 2027 compared to the current year. In subsequent years, spending is expected to rise further (2028: €586,9 billion; 2029: €588,9 billion; 2030: €625,1 billion), as is net borrowing (2028: €134,9 billion; 2029: €137,1 billion; 2030: €152,7 billion). "With this, the federal government is creating commitment and planning certainty. These key figures are an important step towards consolidating Germany's strength and making the country more resilient to crises," promises the [unclear - possibly a government spokesperson]. Ministry of Finance.

Criticism from the craft industry

The trades do not share this opinion. Central Association of German Crafts The German Confederation of Skilled Crafts (ZDH) sees no strategic direction for strengthening competitiveness. "The associated relief effect is insufficient overall. The key figures for the 2027 federal budget show that it is not economic strength that is growing in Germany, but rather the crushing burden of interest payments," explains ZDH President Jörg Dittrich. "In crucial areas, the key figures now presented leave business owners and entrepreneurs who are supposed to invest in Germany completely in the dark." The key figures offer hardly any guidance.

“Instead, accounting entries disguised as global positions reveal that the government needs to revise its budget to present a sustainable one. It has long been true that today's debt is tomorrow's tax increases,” said Dittrich. The German tax system is no longer competitive and poses a threat to jobs and the survival of small and medium-sized enterprises (SMEs). The president of the German Confederation of Skilled Crafts and Trades is therefore once again calling for “a complete turnaround away from short-sighted policies and towards comprehensive structural reforms.” If these reforms fail to materialize, Germany risks further weakening its economic position, with noticeable consequences for skilled trades and SMEs as a whole.

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The federal government, on the other hand, speaks of fundamental reforms it is implementing to promote economic growth, future-proof social systems, and provide relief for citizens and businesses. It has announced an income tax reform for this year to ease the burden on low and middle incomes. All ministries are expected to cut costs, including through reductions in social benefits. Increased revenue is to be generated through a plastics tax, a sugar tax, and higher alcohol and tobacco taxes. Structural reforms are intended to make the social security systems more efficient and future-proof.

The statutory health insurance (GKV) system is intended to remain affordable with the GKV Contribution Rate Stabilization Act, which was also passed. The skilled trades sector is critical of this measure as well: The draft legislation falls far short of the announced savings targets. "A reduction in ancillary wage costs is thus a long way off, as is a return to a total social security contribution of less than 40 percent," said Dittrich. For labor-intensive craft businesses, this sends a very problematic signal and represents a missed opportunity for the government to reduce the burden on both businesses and employees.

ZDH calls for cost containment

"The developments in statutory health insurance are particularly critical. Decreasing federal subsidies and the continued financing of non-insurance-related services through contributions are leading to a one-sided burden on businesses and employees. This has direct negative consequences for investment, employment, and the competitiveness of Germany as a business location. Instead, we urgently need a sustainable and cost-containment reform of the healthcare system," demands Dittrich.

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