Europe's news in English

COPY LINK

BUDGET

Politicians want car scrapping money back

In light of the German auto industry’s buoyant earnings, politicians from the ruling coalition suggested Tuesday that the companies repay the money they earned during the government-sponsored “cash for clunkers” stimulus programme in 2009.

Published: 3 August 2010 08:43 CEST

Politicians want car scrapping money back

Photo: DPA

Altogether the German government allocated €5 billion for the popular programme, enough to fund the €2,500-subsidy for two million new cars. Applicants junked cars at least nine-years-old to get new vehicles with the Abwrackprämie, part of the government’s second stimulus package.

Since then Germany car companies have reported steadily increasing sales, prompting Christian Democratic (CDU) budgetary policy expert Alexander Funk to tell daily Bild that Berlin should call on the auto industry to take part in paying for the programme.

Daniel Volk, member of the CDU’s junior coalition party the pro-business Free Democrats and member of the parliamentary budgetary committee, said German taxpayer should not have to bear the burden for benefiting the industry.

“The auto industry is the great profiteer of the car scrapping premium, for which the German taxpayers carried the costs,” he told Bild. “It is time that the branch takes on a portion of this.”

Meanwhile German luxury car maker BMW said Tuesday that its second-quarter net profit leapt seven fold to €834 million, exceeding market expectations.

Analysts polled by Dow Jones Newswires had forecast net profit of €674 million at the leading premium auto manufacturer.

Member comments

Log in here to leave a comment.

Become a Member to leave a comment.

Beskæftigelsesfradraget: What is Denmark's employment allowance?

What is the employment allowance?

The Beskæftigelsesfradraget (from beskæftigelse, meaning employment, and fradrag, meaning rebate) was brought in by the centre-right Liberal Party back in 2004, the idea being that it would incentivise people to get off welfare and into a job.

Everyone whose employer pays Denmark’s 8 percent AM-bidrag, or arbejdsmarkedsbidrag, automatically receives beskæftigelsesfradraget. Unlike with some of Denmark’s tax rebates, there is no need to apply. The Danish Tax Agency simply exempts the first portion of your earnings from income taxes.

In 2022, beskæftigelsesfradraget was set at 10.65 percent of income with a maximum rebate of 44,800 kroner.

How did the government agree to change the employment allowance in its coalition deal?

In Responsibility for Denmark, the coalition agreement between the Social Democrats, the Liberals and the Moderate Party, the new government said it would set aside 5 billion kroner for tax reforms.

Of this, 4 billion kroner was earmarked for increasing the employment allowance, with a further 0.3 billion going towards increasing an additional employment allowance for single parents.

According to the public broadcaster DR, the expectation was that this would increase the standard employment allowance to 12.75 percent up to a maximum rebate of 53,600 kroner.

How might this be further increased, according to Børsen?

According to a report in the Børsen newspaper, the government now plans to set aside a further 1.75 billion kroner for tax reforms, of which nearly half — about 800 million kroner — will go towards a further increase to the employment allowance.

The Danish Chamber of Commerce earlier this month released an analysis in which it argued that by raising removing all limits on the rebate for single parents and raising the maximum rebate for everone else by 20,300 kroner, the government could increase the labour supply by 4,850 people, more than double the 1,500 envisaged in the government agreement.

According to the Børsen, the government estimates that its new extended allowance will increase the labour supply by 5,150 people.

Url copied to clipboard!