Parliament hikes own pay, cuts jobless tax

16th November 2007, Comments 0 comments

16 November 2007, Berlin - The German parliament voted for a pay increase for its own members Friday and also to cut payroll tax contributions to the national unemployment fund.

16 November 2007

Berlin - The German parliament voted for a pay increase for its own members Friday and also to cut payroll tax contributions to the national unemployment fund.

In the face of opposition from the smaller parties, Chancellor Angela Merkel's broad coalition pushed through a 9.4-per-cent pay hike for Bundestag members in two stages, with 377 voting in favour and 166 against.

By 2009, Bundestag members, who currently number 613, are to earn a gross monthly salary of 7,668 euros (11,190 dollars).

The official retirement age was simultaneously raised to 67, in line with a gradual increase of the pensionable age from 65 across the working population.

The Bundestag also voted to cut payroll tax contributions to the unemployment fund to 3.3 per cent from 4.2 per cent previously, in the light of a large surplus in the fund. The cut is effective from the beginning of next year.

German unemployment has declined steadily to 3.4 million on a seasonally adjusted basis from a little over 5 million in the spring of 2005.

The Bundestag was also voting on extending unemployment benefit payments to older claimants. The easing of market reforms implemented under the previous government was expected to be passed by a large majority.

Opposition members used the debate on fiscal issues to criticise government policy, following the approval by the budget committee Thursday of the 2008 budget, containing new borrowing of 11.9 billion euros.

Although the figure was 1 billion euros lower than forecast earlier by Finance Minister Peer Steinbrueck, the opposition referred to a "missed chance" in curbing new borrowing.

The Bundestag is to vote on the budget at the end of this month.

DPA


Subject: German news

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