Hamburg economy: Corona hole not as deep as expected

Hamburg economy: Corona hole not as deep as expected

Hamburg’s economy has been hit harder by the corona crisis than the national average. This was announced by Hamburg’s Finance Senator Andreas Dressel (SPD) on Tuesday when the Hamburg May tax estimate was presented. Tax revenues, however, have developed less badly than expected.

Tax revenues in 2020 were “not quite as badly slumped as initially feared,” said Dressel. For the past year they would be 30 million euros above the expectation of the November estimate. By 2025, tax revenue is expected to be 619 million euros more than was last predicted.

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Hamburg: More tax income than expected

Better income than expected in 2020 would also have led to a decrease in new debt of 2.5 billion euros. The city’s debt level has risen from 23.3 to 25 billion euros. Using the credit authorization, 27.6 billion would have been possible.

There are signs “of a very strong, indeed above-average recovery, which will also make itself felt with some cuts on the income side,” said Dressel. In terms of financial policy, “light is visible at the end of the tunnel for the first time”.

Dressel sees no scope for tax cuts

Nevertheless, the inroads of the Corona crisis can still be felt for a long time. “There will be no scope for new spending requests or tax cuts in the post-Corona period,” said the Senator. Rather, the signs point to “responsible consolidation”.

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According to the experts, the pre-crisis level will only be reached in 2023, according to the experts, with the taxes remaining in Hamburg after the financial equalization not until a year later. If you look at the last estimate before the pandemic, the corona hole in revenue expectations for the years 2020 to 2024 amounts to a total of 3.9 billion euros.

CDU criticizes rise in debt

“Although the tax payments and additional federal aid turned out to be much better than expected, the debt rose by 1.7 billion euros,” says Thilo Kleibauer, budgetary spokesman for the CDU parliamentary group. This significant increase needs to be explained, especially since the economic position was further increased at the same time.

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Left wants to bring in money through wealth tax

The red-green Senate had very carelessly planned high credit options for the coming years. “But it is very clear here: The debts taken on for the Corona emergency situation must not be used for purposes other than those for which they were intended.Personnel cuts and savings plans are the “completely wrong way”.

FDP: The Senator of Finance is hiding bad news

The FDP member of parliament Anna von Treuenfels-Frowein said the finance senator was silent about the bad news behind the positive news. Red-Green did not use the leeway to finally slow down the continued growth in spending by core and shadow households in Hamburg.

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“It would be wiser to fuel the upswing in Hamburg in the short term with tax and levy moratoria, where possible also with tax cuts, in order to increase tax revenues in the medium term,” said von Treuenfels-Frowein. (dpa / mp).