ZDB and ZDH respond to reform proposals

The construction industry has commented on reform proposals by Finance Minister Lars Klingbeil and welcomed the planned strengthening of housing construction. The German Confederation of Skilled Crafts (ZDH) criticizes individual initiatives by the coalition partners and calls for more seriousness in the debate.

"Germany needs fundamental reforms." This was stated by Federal Finance Minister Lars Klingbeil (SPD) in a speech at the Bertelsmann Foundation He stated firmly in Berlin: "Those who rely on the status quo today are choosing decline. Too often we find excuses to do nothing or to avoid doing uncomfortable things. That's no longer acceptable," he declared. The starting point for change must be economic sovereignty. Germany needs a new growth model, greater economic strength, good jobs, and a competitive framework.

The state has stepped in to cover many problems during past crises and has invested considerable sums to mitigate their impact. "That won't work anymore in 2026. We can't simply respond to every crisis and every problem with even more money." Klingbeil announced structural changes that will also involve some difficult decisions. "As a society, we will have to work harder overall. I want us to create a system where a willingness to perform pays off. Where it's worthwhile to work more," the minister stated.

"Reforms are essential"

In addition to changes in the social sphere, a radical reduction in bureaucracy and significantly less regulation are needed. Klingbeil announced his intention to present an income tax reform aimed at providing relief to 95 percent of employees. He emphasized the importance of lowering energy costs and the need to reduce rents. "This requires, above all, more housing. Therefore, I want the federal government to be able to build housing on a large scale in the future. I propose the establishment of a state-owned housing corporation." Furthermore, construction costs must be reduced.

"The Federal Finance Minister is right: Reforms are essential to sustainably strengthen Germany's competitiveness, even if they involve noticeable cutbacks," commented Felix Pakleppa, Chief Executive of the Central Association of the German Construction Industry (ZDB). The recognition that prosperity must be earned is also a positive aspect. This requires suitable framework conditions such as lower taxes and levies, competitive energy prices, and a consistent reduction of bureaucratic hurdles. The ZDB rejects any expansion or increase of taxes and levies. There is sufficient scope for savings.

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Strengthening housing construction

“We expressly welcome the Federal Finance Minister’s proposal to strengthen housing construction in Germany,” says Pakleppa. “However, doubts exist as to whether establishing a state-owned housing company is the appropriate instrument for this purpose. It would be significantly more effective to specifically promote private investment.” According to the ZDB (Central Association of the German Construction Industry), tens of thousands of prospective homeowners are waiting for attractive KfW (German Development Bank) loan conditions. Every newly built apartment contributes to easing the pressure on the rental market.

Linking the special depreciation allowance (currently in effect until 2029) to the EH 55 energy standard could provide a particularly strong boost. Pakleppa: "This would significantly accelerate the construction of urgently needed rental apartments. Compared to a state-owned housing company, where the government would have to bear the full cost of financing, this approach is considerably more efficient: For every euro of tax depreciation, approximately three and a half euros in tax revenue are generated. This is not only the more economical but also the faster way to sustainably revitalize housing construction."

ZDH criticizes "counterproductive" communication

The Central Association of German Crafts The German Confederation of Skilled Crafts (ZDH) criticizes the coalition's "counterproductive" communication. It is frustrating that a new test balloon is launched every day. "First, higher top tax rates are proposed, now a VAT increase is on the table. Furthermore, with some initiatives from government members, it's unclear whether they represent government policy or party line. Unfortunately, it all seems very half-baked and uncoordinated," explains ZDH President Jörg Dittrich. 

This undermines the fundamental willingness of Germans to embrace reform. "This approach is also causing considerable irritation and uncertainty among businesses and employees. I can only urgently appeal for a serious approach in the reform debate. Disjointed, isolated proposals stifle any meaningful discussion. German industry expects the federal government to present a coordinated, comprehensive reform concept in a timely manner." This depends particularly on the implementation of the promised relief measures, the consistent use of special debt for additional investments, and a reform agenda for the social security systems.

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