Legislation

The Budget Act

The federal budget is drawn up each year. It determines the level of federal revenue from taxes and duties, etc., and, more importantly, sets the level of federal expenditure for particular purposes. The federal budget as a whole is broken down into departmental budgets for each of the ministries and supreme federal authorities. Each departmental budget comprises a great number of titles and items giving detailed estimates of revenue and expenditure for the financial year. The budget is sometimes referred to as "the Government programme in figures" as it shows exactly what measures the Government plans to undertake in the coming year and the amount of funds it intends to spend in particular areas.

The budget is laid down in the Budget Act. In other words, like any other law, the budget can only be approved by the Bundestag. The budget is simply submitted by the Federal Government to the Bundestag as a bill and can be adopted, rejected or amended by the Bundestag like any other bill.

The budget also stipulates how many civil servants and other staff the Federal Chancellor may employ and establishes their salary levels. This applies to each of the federal ministries and also to the Bundestag itself. Parliament thus decides how many staff may be employed, what qualifications they should hold and what duties they should perform. It is therefore not surprising that the personnel budget is often the most contentious part of the budget debate. Moreover, the Bundestag also has the final say as regards the amount of funds the federal administration may spend on non-personnel expenditure.

Of course, such decisions on revenue and expenditure cannot be made arbitrarily by the Bundestag either. In most cases, the Bundestag is bound by previous legislation in which it has already established the volume of funds which must be set aside for particular purposes. A substantial part of the resources available for the financial year is predetermined by legislation on pensions and social assistance as well as in laws concerning financial support for education and training, agricultural subsidies, coal subsidies, new hospital facilities, structural programmes, armaments planning and other areas. Parliament therefore cannot simply decide to amend previous legislation via the Budget Act. Legislation is in place to ensure that no financial measures are introduced in the Budget Act on top of those which have already been decided upon. Numerous constraints of this and other kinds ensure, for good reason, that the budget does not have to be drafted anew each year. Parliament therefore only needs to debate and decide upon individual reductions or increases in revenue or expenditure each year. The budget debate is, moreover, highly significant in political terms. The debate frequently involves a long, hard struggle and heated public arguments between the Federal Government and the Bundestag, particularly between the Government and the opposition parties, before agreement can be reached on the content of the budget.

The federal budget goes through the same procedure in principle as any other bill: a first reading in the plenary, the committee stage and a second and third reading in the plenary of the Bundestag. As the budget is only valid for one year, this procedure is repeated annually and usually lasts from September to December each year.

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