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22 November 2018

Overview of fed­er­al bud­getary and fi­nan­cial da­ta up to and in­clud­ing Oc­to­ber 2018

Translated extracts from the Federal Ministry of Finance’s November 2018 monthly report

Federal budget trends up to and including October 2018

Trends in the federal budget

 

Actual 2017

2018 target

Actual1 January–

October 2018

Expenditure (€bn)2

325.4343.6275.2

Year-on-year change in % (year to date)

 +1.9
Revenue (€bn)2330.4341.7276.0

Year-on-year change in % (year to date)

 +6.1
Tax revenue (€bn)309.4321.3254.9

Year-on-year change in % (year to date)

 +5.1

Fiscal balance (€bn)

5.0-1.90.9

Financing/use of surplus:

-5.01.9-0.9

Cash resources (€bn)

--45.3

Seigniorage (€bn)

0.30.30.2

Movements in reserves3 (€bn)

-5.31.60.0
Net borrowing4 (€bn)0.00.0-46.4
Any discrepancies in totals are due to rounding.
1 As per accounts.
2 Excluding revenue and expenditure from internal offsetting
3 Negative values denote accumulation of reserves.
4 (-) debt repayment; (+) borrowing
Source: Federal Ministry of Finance

Revenue

Federal revenue for the January–October 2018 period totalled €276.0bn, up by 6.1% on the year (€15.8bn). Tax revenue (including EU own resources) increased by 5.1% (€12.3bn). Tax revenue trends this year have been affected by various special factors. In 2017, approximately €7.3bn of nuclear fuel duty (including interest) had to be returned to energy supply companies following the Federal Constitutional Court’s ruling of 13 April 2017. In addition, transfers of GNI-based own resources to the EU have been up significantly in 2018, by approximately €7.4bn on the year.

Other revenue was 19.9% (€3.5bn) higher on the year in the January–October 2018 period, mainly due to an increase in allocations from the Bundesbank’s profits (allocations so far this year have totalled €1.9bn, an increase of €1.5bn on the year). In addition, profits from the Federation’s holdings were up by €0.3bn on the year.

Expenditure

Cumulative federal expenditure for the period from January to October 2018 totalled €275.2bn, an increase of 1.9% (€5.2bn) on the year. Federal spending is separated into consumption and investment expenditure. In the January–October 2018 period, consumption spending was 2.3% higher than in the same period last year. This can be attributed primarily to increases in military procurement spending (up by 6.8%) and in ongoing grants to public administrations (up by 20.9%). In the latter category, the Federation’s allocation of €2.8bn to the Energy and Climate Fund had the biggest impact on results. This category also includes an increase in federal grants to reimburse the Länder for social spending on basic income support for older people and for people with reduced earning capacity. These grants totalled roughly €900m in the fourth quarter of 2017, but the reimbursements were not paid until 2018. There was no such spending in the first quarter of 2017. Grants for other areas saw a below-average year-on-year rise in the January–October 2018 period, tempering the increase in consumption expenditure. Nevertheless, there was a marked 2.9% increase in social security spending during this period, mainly as a result of higher allocations to the general pension insurance system (up by 3.6%). Interest expenditure fell sharply on the year by 8.1% in the first ten months of 2018. Investment spending totalled €23.6bn; this is approximately 59% of the target level for 2018. The budgeted amount includes a €2.4bn allocation to a special digital infrastructure fund. However, the fund is currently still going through the parliamentary procedure, meaning that there have not yet been any actual outflows. Investment spending was down by 1.9% on the year in the January–October 2018 period. This is mainly due to the allocations made in August 2017 to increase the equity of Deutsche Bahn AG by €1bn. Fixed asset investment saw a significant rise of 5.5% on the year, which boosted investment spending totals.

Fiscal balance

The federal budget recorded a surplus of €0.9bn for the period from January to October 2018.

Revenue and expenditure are subject to strong fluctuations over the course of the fiscal year and thus have an uneven effect on cash funds in individual months. Net borrowing also tends to fluctuate considerably over the course of the year. This means that the fiscal balance at this point in the year and the corresponding net borrowing figures are not reliable indicators of the end-of-year figures for the fiscal balance and net borrowing.

Trends in federal expenditure by function

Actual 2017

2018 target

Actual

Year-on-year

change (year to date)

January to

October 2017

January to

October 2018

in €m

share in %

in €m

share in %

in €m

in %

General public services77,00623.781,712 23.860,20761,439+2.0

Economic cooperation and development

8,3302.69,389 2.75,4185,472+1.0

Defence

36,41911.238,002 11.128,69329,729+3.6

Government, central administration

15,8584.917,388 5.113,65514,481+6.1

Revenue administration

4,5541.44,891 1.43,6943,814+3.2
Education, science, research, cultural affairs22,9847.124,207 7.016,31416,318+0.0

Support for school and university students and training programme participants

3,6031.13,993 1.22,8242,734 -3.2

Science, research and development outside of higher education institutions

12,2683.813,290 3.97,7128,327+8.0
Social security, family affairs and youth, labour market policy168,80151.9173,006 50.4146,673150,515+2.6

Social insurance including unemployment insurance

111,70334.3115,063 33.599,507102,400+2.9

including:

       

General pension insurance

82,381 25.385,316 24.874,27076,971+3.6

Labour market policy

37,59011.636,728 10.731,10930,317 -2.5

including:

       

Basic income support for jobseekers under Book II of the Social Code

21,4236.620,400 5.918,19517,487 -3.9

Government housing and heating allowances under Book II of the Social Code

6,7532.16,900 2.05,6325,783+2.7

Family assistance, welfare services, etc.

8,2962.58,946 2.66,9407,554+8.9

Social benefits for the consequences of war and political events

1,9300.62,082 0.61,6391,567 -4.4

Health, environment, sport, recreation

2,3030.72,856 0.81,5581,669+7.1
Housing, regional planning and local community services2,9230.93,549 1.02,3342,199 -5.8

Housing, home ownership savings premium

2,2670.72,580 0.82,0911,928 -7.8
Food, agriculture and forestry1,0680.31,233 0.4577457 -20.7
Energy and water supply, trade and services4,1951.35,481 1.63,3522,847 -15.1

Regional support measures

7260.2910 0.3477398 -16.5

Mining, manufacturing and construction

1,5320.51,491 0.41,4271,266 -11.3
Transport and communication21,2286.521,140 6.216,32316,080 -1.5

Roads

9,4842.910,081 2.97,0117,827+11.6

Railways and public transport

7,0472.26,162 1.85,5614,656 -16.3
Financial management30,5329.430,416 8.922,91723,940+4.5

Interest expenditure and borrowing-related expenditure

17,5005.418,107 5.316,54715,208 -8.1
Total expenditure1325,380100.0343,600 100.0269,970275,184+1.9
1 Excluding expenditure from internal offsetting
Source: Federal Ministry of Finance
Trends in federal expenditure by economic category

Actual 2017

2018 target

Actual

Year-on-year

change (year to date)

January to

October 2017

January to

October 2018

in €m

share in %

in €m

share in %

in €m

in %

Consumption expenditure291,36789.5304,48388.6245,949251,626+2.3

Human resources expenditure

31,8249.833,3979.727,15727,898+2.7

Salary payments

23,1827.124,7967.219,55520,146+3.0

Pensions

8,6432.78,6022.57,6027,752+2.0

Operating expenditure

28,6938.830,5878.920,65321,169+2.5

Administrative expenditure (excl. human resources)

1,5710.51,5880.51,1741,252+6.6

Military procurement

10,6253.312,3163.67,0087,488+6.8

Other

16,4985.116,6824.912,47212,428 -0.4

Interest expenditure

17,4975.418,0985.316,54415,204 -8.1

Ongoing grants and subsidies

212,58265.3221,49164.5180,914186,678+3.2

to public administrations

24,8147.628,6918.420,13624,340+20.9

to other areas

187,76857.7192,80056.1160,778162,337+1.0

including:

       

Companies

28,5278.830,3628.822,66722,150 -2.3

Pensions, assistance, etc.

30,1279.329,3918.625,61125,109 -2.0

Social security funds

117,49536.1120,19035.0103,910106,932+2.9

Other asset transfers

7700.29100.3681677 -0.6

Investment expenditure

34,01310.539,80311.624,02123,559 -1.9

Financial assistance

24,1707.429,3128.517,22016,387 -4.8

Grants and subsidies

21,4216.627,1317.915,09815,578+3.2

Loans, guarantees

1,2210.41,6180.5855674 -21.2

Acquisition of holdings; capital contributions

1,5280.55640.21,267136 -89.3

Fixed asset investment

9,8433.010,4903.16,8017,172+5.5

Construction projects

7,6312.37,7422.35,3975,760+6.7

Acquisition of movable assets

1,7130.51,9540.61,0591,025 -3.2

Acquisition of real property

4990.27940.2345387+12.2
General reduction/increase in expenditure00.0-686-0.200X
Total expenditure1325,380100.0343,600100.0269,970275,184+1.9
1 Excluding expenditure from internal offsetting
Source: Federal Ministry of Finance
Trends in federal revenue

Actual 2017

2018 target

Actual

Year-on-year

change (year to date)

January to

October 2017

January to

October 2018

in €m

share in %

in €m

share in %

in €m

in %

I. Tax revenue

309,37693.6321,30794.0242,576254,870+5.1

Federal share of joint taxes:

252,63076.5263,90077.2200,270211,001+5.4

Income tax and corporation tax (incl. final withholding tax on interest and capital gains)

136,68541.4144,50342.3105,332113,569+7.8

of which:

       

Wages tax

83,12125.287,74125.764,44768,715+6.6

Assessed income tax

25,2567.626,1737.718,85419,116+1.4

Non-assessed taxes on earnings

10,4513.210,9503.28,92110,148+13.8

Final withholding tax on interest and capital gains

3,2271.03,4741.02,6042,684+3.1

Corporation tax

14,6294.416,1654.710,50612,906+22.8

Value added taxes (VAT)

114,00534.5117,42634.493,61396,038+2.6

Trade tax apportionment

1,9410.61,9710.61,3241,395+5.4

Energy duty

41,02212.441,30012.129,03629,060+0.1

Tobacco duty

14,3994.414,1604.111,14811,270+1.1

Solidarity surcharge

17,9535.418,7505.514,19415,066+6.1

Insurance tax

13,2694.013,6704.011,79312,213+3.6

Electricity duty

6,9442.16,9302.05,7315,775+0.8

Motor vehicle tax

8,9482.79,0102.67,6887,766+1.0

Nuclear fuel tax

-7,262-2.200.0-7,2620X

Alcohol duty

2,0960.62,1020.61,7341,757+1.3

Coffee duty

1,0570.31,0550.3855836 -2.2

Aviation tax

1,1210.31,1750.3884940+6.3
Deductions       

Supplementary grants to Länder

9,229X8,545X7,0936,724 -5.2

EU own resources (GNI-based)

14,258X22,610X11,05818,417+66.5

EU own resources (VAT-based)

2,362X2,510X1,9682,184+11.0

Grants to Länder for public transport

8,348X8,498X6,9567,082+1.8

Grants to Länder for motor vehicle tax and HGV toll

8,992X8,992X6,7446,744+0.0

II. Other revenue

21,0256.420,3606.017,65621,163+19.9

Revenue from economic activity

3,8681.25,1721.53,4755,334+53.5

Interest revenue

3440.13090.1255262+2.7

Loan repayments, holdings, privatisation proceeds

1,7860.51,9390.61,3161,947+47.9

Total revenue1

330,401100.0341,667100.0260,232276,033+6.1
1 Excluding revenue from internal offsetting
Source: Federal Ministry of Finance

Tax revenue in October 2018

2018 trends in tax revenue (excluding local authority taxes)1

2018

October

Year-on-year
change 

January

to October

Year-on-year

change  

2018 estimates4

Year-on-year
change

in €m

in %

in €m

in %

in €m

in %

Joint taxes      
Wages tax216,120+8.3165,942+6.6207,800+6.3
Assessed income tax-228X44,984+1.460,200+1.3
Non-assessed taxes on earnings917+16.820,355+13.623,200+10.9

Final withholding tax on interest and capital gains

(including the former withholding tax on interest income)

345 -24.26,100+3.17,491+2.2
Corporation tax-101X25,812+22.833,330+13.9
Value added taxes (VAT)18,908+2.3193,127+3.4234,650+3.7
Trade tax apportionment975+13.73,637+5.44,880+4.2
Increased trade tax apportionment919+8.63,079+3.84,010+2.9
Total joint taxes37,855+9.1463,035+5.7575,561+5.1
Taxes accruing to the Federation
Energy duty3,615 -0.629,060+0.141,100+0.2
Tobacco duty1,474+45.911,270+1.114,300 -0.7
Alcohol duty (formerly spirits duty)168 -5.21,756+1.32,120+1.3
Insurance tax631+6.312,213+3.613,700+3.2
Electricity duty567 -0.95,775+0.87,000+0.8
Motor vehicle tax676+4.57,766+1.09,010+0.7
Aviation tax122+19.3940+6.31,175+4.9
Nuclear fuel duty0X0X0X
Solidarity surcharge999+8.815,066+6.118,800+4.7
Other taxes accruing to the Federation117 -4.61,172 -0.61,447+0.1
Total taxes accruing to the Federation8,369+7.685,019+11.7108,652+8.7
Taxes accruing to the Länder
Inheritance tax632+54.25,693+11.96,470+5.8
Real property transfer tax1,250+18.311,688+6.813,840+5.3
Betting and lottery tax151+2.21,564+2.31,872+1.9
Beer duty51 -2.8562+0.1670+0.9
Other taxes accruing to the Länder23+6.1404+2.3464+2.9
Total taxes accruing to the Länder2,108+24.819,911+7.623,316+5.0
EU own resources
Customs duties387 -8.44,168 -1.75,050 -0.2
VAT-based own resources201+2.11,983+0.72,410+2.0
GNI-based own resources1,866+18.116,556+49.721,180+48.6
Total EU own resources2,454+11.622,708+31.528,640+32.1
Federation321,422+8.9257,624+6.0323,820+4.7
Länder321,807+9.2253,199+5.1311,576+4.4
EU2,454+11.622,708+31.528,640+32.1
Local authorities’ share of income and value added tax3,035+10.138,602+8.048,542+7.5
Total tax revenue (excluding local authority taxes)48,718+9.2572,133+6.6712,579+5.6
1 Methodology: Total cash income from the various taxes is recorded and allocated to the various government levels as stipulated by law. Tax amounts actually received in the current month by individual government levels may differ from the target amounts for technical reasons.
2 After deduction of child benefit refunds by the Federal Central Tax Office
3 After supplementary grants; any discrepancies with the table on trends in federal revenue are due to the methodology used (see footnote 1).
4 Results of the Working Party on Tax Estimates of November 2018
Source: Federal Ministry of Finance

Total tax revenue (excluding local authority taxes) was up by 9.2% in October 2018 over the same month last year. Revenue from joint taxes was up by 9.1% on the year during this period. This increase was driven mainly by higher revenues from wages tax and corporation tax. Wages tax revenue posted a particularly sharp gain, probably due to retroactive wage payments resulting from previously agreed wage increases under collective agreements. Last year in October, the final refunds of corporation tax were issued under an arrangement to reimburse payments made under previous corporation tax rules. This caused a baseline effect that impacted the results for October 2018. Receipts from non-assessed taxes on earnings posted solid growth as well. In contrast, VAT revenue grew at a relatively weak pace in October. Revenue from taxes accruing solely to the Federation was up by 7.6% on the year, due in part to a technicality that drove up tobacco duty revenue totals in October. Receipts from taxes accruing solely to the Länder surged by 24.8% on the year.

EU own resources

Transfers of own resources to the EU, including customs duties, totalled approximately €2.5bn in October 2018, up 11.6% over the same month last year. Transfers to the EU are based on the planned financial framework for 2018, with fluctuations over the course of the year depending on the EU’s financing needs at any given time.

Cumulative overview of the January-October 2018 period

In the first ten months of 2018, total tax receipts were up by 6.6% on the year. Broken down by category, revenue from joint taxes was up by 5.7%, receipts from federal taxes climbed by 11.7%, and the yield from Länder taxes increased by 7.6%.

Distribution among the Federation, Länder and local authorities

The Federation’s tax receipts (after accounting for supplementary federal grants to the Länder) were up by 8.9% on the year in October 2018. Länder tax receipts recorded a year-on-year gain of 9.2%. These results were driven by the increased share of revenue from joint taxes allocated to the Federation and the Länder: the Federation’s share increased by 8.6% and the share of the Länder rose by 9.3%. In addition, taxes whose receipts are allocated specifically to the Federation or specifically to the Länder also contributed to the strong revenue gains posted in October. Transfers of EU own resources, which were higher on the year, had a slightly negative impact on the Federation’s overall revenue figures for the month. The local authorities’ take from joint taxes was up by 10.1% on the year.

Joint taxes

Wages tax

Wages tax revenue again posted strong growth in October 2018, with gross revenue climbing by 6.7% on the year. This ongoing positive trend is being driven by steady employment growth and rising incomes. In addition, the October results were likely boosted by retroactive wage payments resulting from previously agreed wage increases under collective agreements. Child benefit payments – which are financed from wages tax receipts – fell by 0.3% on the year in October 2018. One Land is experiencing problems with preparing the underlying data for child benefit payments, which continues to skew this figure. Cash receipts from wages tax are not impacted by this effect, however. On balance, cash receipts from wages tax were up by 8.3% on the year in October 2018. In cumulative terms, cash receipts from wages tax were up by 6.6% on the year in the first ten months of the year.

Corporation tax

Corporation tax refunds totalling approximately €0.1bn were paid out in October 2018. In October of the previous year, refunds amounted to roughly €1.4bn; this included €1.1bn in refunds under an arrangement that provided for the incremental reimbursement of corporation tax (over)paid under previous corporate tax rules. The final refunds under this arrangement were paid in October 2017, which largely explains the sharp year-on-year drop in refunds recorded this year. Other fluctuations in components of corporation tax revenue remained within the usual range of variation that occurs as part of assessment activity. Taken cumulatively, cash receipts from corporation tax were up by 22.8% on the year for the ten months from January to October 2018.

Assessed income tax

Like corporation tax revenue, receipts from assessed income tax in October were driven mainly by assessment activity and remained roughly unchanged on the year. Gross receipts from assessments were up by €0.2bn on the year in October 2018. However, employee refunds were also higher on the year, and after these are subtracted from the gross figure, net cash receipts from assessed income tax totalled €0.2bn. In cumulative terms, cash receipts from assessed income tax totalled €45.0bn in the ten-month period from January to October, an increase of 1.4% on the year.

Non-assessed taxes on earnings

October 2018 saw a 12.6% year-on-year increase in gross receipts from non-assessed taxes on earnings. Taking into account a decline in refunds paid out by the Federal Central Tax Office, which are financed from this revenue, cash receipts from non-assessed taxes on earnings rose by 16.8%. Overall, the trend in revenue from non-assessed taxes on earnings has been very volatile over the course of the year. The cumulative result provides a more solid basis for analysis: here, cash receipts from non-assessed taxes on earnings were up by 13.6% on the year in the January–October period.

Final withholding tax on interest and capital gains

Revenue from final withholding tax on interest and capital gains fell by 24.2% on the year in October. In the ten months from January to October 2018, cash receipts from final withholding tax on interest and capital gains were up by 3.1% on the year.

Value added taxes (VAT)

Receipts from value added taxes posted a moderate gain of 2.3% on the year in October 2018. Revenue from domestic VAT was up by 2.3%, while import VAT receipts climbed by 2.5%. Cumulative cash receipts from value added taxes were up by 3.4% on the year in the ten-month period from January to October 2018.

Taxes accruing to the Federation

In October 2018, revenue from taxes accruing solely to the Federation was up by 7.6% on the year. This relatively large increase was due in part to the fact that roughly €200m in tobacco duty receipts from September were not posted until October. Furthermore, tobacco duty revenue surged again in October, by 45.9%. Other taxes posting revenue growth included solidarity surcharge (up by 8.8%) and insurance tax (up by 6.3%), while energy duty and alcohol duty were down on the year (by 0.6% and 5.2%, respectively). Trends in revenue from other taxes had only a minor impact on the overall results for federal taxes.

Taxes accruing to the Länder

The yield from taxes accruing solely to the Länder was up by 24.8% on the year in October 2018. This outcome was driven mainly by higher receipts from inheritance tax (up by 54.2%) and real property transfer tax (up by 18.3%). Revenue gains were also recorded for fire protection tax (up by 6.4%) and betting and lottery tax (up by 2.2%). In contrast, beer duty revenue was down slightly by 2.8%.

Borrowing and guarantees

Debt trends for the Federation and its special funds (in €m)

Debt level

Borrowing
(increase)

Debt repayment
(decrease)

Debt level 

Change in debt level
(balance)

30 September 2018

October 2018

October 2018

31 October 2018

October 2018

Budget borrowing1,083,88412,922-24,0341,072,771-11,113

broken down by purpose

Federal budget1,042,46112,622-24,0341,031,048-11,413
Financial Market Stabilisation Fund22,466153-22,618153
Investment and Redemption Fund18,958147-19,105147

broken down by debt type

Federal securities1,071,26412,922-24,0341,060,151-11,113

Federal bonds

703,2773,231-706,5083,231

30-year federal bonds

215,5611,295-216,8571,295

10-year federal bonds

487,7161,936-489,6511,936

Inflation-linked federal securities

64,304452-64,755452

30-year inflation-linked federal bonds

7,70915-7,72415

10-year inflation-linked federal bonds

56,594437-57,031437

Federal notes

194,3562,737-17,000180,093-14,263

Federal Treasury notes

90,5752,792-93,3672,792

Treasury discount papers issued by the Federation

17,3403,710-7,02414,026-3,314
Other federal securities1,412--111,401-11
Securitised loans8,145--8,145-
Other loans and ordinary debts4,475--4,475-

broken down by maturity

up to one year157,149  151,747-5,402
one to four years336,988  339,5662,578
over four years589,748  581,459-8,289

Additional information1

Liabilities from the indexing of inflation-linked federal securities4,548  4,664116
Reserves in accordance with the Final Payment Financing Act (Schlusszahlungsfinanzierungsgesetz)3,505  3,51612

1 Liabilities resulting from indexing include the amount by which the original issuance price has increased due to inflation between the start date and the specified reference date. In contrast, reserves include only the increases that are noted on coupon payment dates (15 April of every year) (section 4(1) of the Final Payment Financing Act) and on reopening dates for inflation-linked securities (section 4(2) of the Final Payment Financing Act).

Any discrepancies in totals are due to rounding.

Source: Federal Ministry of Finance

Guarantees

  

Authorised

amount

Amount allocated

as of 30 September 2018

Amount allocated

as of 30 September 2017

in €bn

Export credit guarantees153.0120.3121.1
Loans to foreign debtors, foreign direct investment, EIB loans65.042.844.0
Financial cooperation projects28.521.117.9
Food stockpiling0.70.00.0
Domestic guarantees158.0101.1103.2
International financial institutions66.060.060.0
Treuhandanstalt successor organisations1.01.01.0
Interest compensation guarantees15.015.015.0

Calendar

Publication schedule1 of the monthly reports
Monthly reportReporting periodPublication date

December 2018 issue

November 201820 December 2018

January 2019 issue

December 201831 January 2019

February 2019 issue

January 201921 February 2019

March 2019 issue

February 201921 March 2019

April 2019 issue

March 201923 April 2019

May 2019 issue

April 201920 May 2019

June 2019 issue

May 201920 June 2019

July 2019 issue

June 201922 July 2019

August 2019 issue

July 201922 August 2019

September 2019 issue

August 201920 September 2019

October 2019 issue

September 201921 October 2019

November 2019 issue

October 201921 November 2019

December 2019 issue

November 201920 December 2019

1 In accordance with the IMF’s Special Data Dissemination Standard Plus (SDDS Plus); see http://dsbb.imf.org

Source: Federal Ministry of Finance

Key dates on the fiscal and economic policy agenda

30 November–1 December 2018

G20 summit in Buenos Aires, Argentina

3–4 December 2018

Eurogroup and ECOFIN Council meetings in Brussels

21–22 January 2019

Eurogroup and ECOFIN Council meetings in Brussels

11–12 February 2019

Eurogroup and ECOFIN Council meetings in Brussels

11–12 March 2019

Eurogroup and ECOFIN Council meetings in Brussels

11–12 April 2019

Meeting of G20 finance ministers and central bank governors in Washington, D.C.

12–14 April 2019

Spring Meetings of the IMF and World Bank in Washington, D.C.
Click here for the full schedule (only in German)

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