Economist Rüdiger Bachmann doesn’t think much of the reduction in VAT on gas consumption. In an interview with ntv.de, he criticized that it was unfair and primarily helped higher earners. In addition, gas must become more expensive in order to prevent a gas shortage.
ntv.de: In view of the skyrocketing prices, the federal government is reducing VAT on gas consumption. A good idea?
Ruediger Bachmann: No. This is highly problematic from an economic point of view. The reduction thwarts the price signals that are necessary to save gas in Germany. It’s also unfair. Because gas customers who still obtain very cheap gas through old contracts will also benefit. This is actually already subsidized as the market price of gas is much higher. Also, those who consume a lot benefit more. These are the rich. Anyone who heats their sauna with gas should be really happy about the measure. It’s frightening that the Greens are going along with this. Economics Minister Robert Habeck has repeatedly said that relief should not primarily benefit higher earners. After all, this reduction in VAT does not help traders with their high gas bills either. The FDP surprised again.
Millions of Germans are facing a real heating cost shock. Isn’t it right to exonerate them?
Naturally. But not like that. The social market economy works differently: Let the prices work and cushion social hardship. In the case of gas prices, this does not mean that only transfer recipients need to be supported. This is required down to the lower middle class.
Doesn’t the fact that the measure works quickly and unbureaucratically speak for the reduction?
There are many other options. Economists have made suggestions on this.
You spoke of the steering effect of prices in the market economy. But is the tax cut on gas consumption such an intervention at all?
Yes, because the tax cut comes at a time when it undermines the price mechanism. This makes gas consumption cheaper. But the gas has to become more expensive for everyone in order to prevent a gas shortage. If not enough gas is saved, there is a risk of rationing in the industry. This tax cut increases the risk of a recession.
Aren’t the rising gas prices and the gas levy already enough incentives to save gas?
Rising gas prices are not reaching consumers fast enough. Many will only feel this next year with the utility bills.
What do you think of the proposal to introduce a gas price cap on basic needs and allow prices above this limit to take full effect?
In principle, that’s a good idea. This would cover basic needs and at the same time there would be a strong incentive to save gas where possible. But we were told that administratively, that is, who has access to which data, is not feasible.
Jan Ganger spoke to Rüdiger Bachmann
