Based on the Federal Government's autumn forecast
The budget is based on the Federal Government's autumn forecast, which estimates an average of 2.5 million unemployed persons in 2023. The BA budget furthermore predicts an average of 0.2 million short-time employees (2022: 0.4 million). Despite an increase in jobs, and a currently robust labour market, the year to come may also bring economic uncertainty, and since developments cannot be predicted in detail, they cannot be taken into account.
Revenue and expenditure
The BA foresees total revenue of 42.6 billion euros, and expenditure of 40.6 billion euros in the 2023 budget. In contrast, this year will close with around 38.1 billion euros in revenue.
The additional revenue in 2023 is due to an increase in employment subject to social security contributions, increasing wages as well as a return to the statutory contribution rate of 2.6 percent. Since 2019, this had been temporarily reduced by 0.2 percent, because the BA had built up a reserve fund of 26 billion euros.
Possible reserve fund
The BA is taking advantage of the positive financial result in order to pay back in full in 2023 the loan of 800 million euros it received this year from the Federal Government.
Assuming the labour market remains robust, the BA may also, as of next year, start to create a reserve fund. Around 1.4 billion euros could, according to the established budget plan, be diverted to the reserve fund. In view of the pandemic, the existing financial reserve had been used up completely.
Reserve fund if labour market situation is positive
If the labour market situation remains robust, the BA would be able to start creating a reserve fund as of next year. According to the current situation, after deduction of the loan which still has to be paid back to the Federal Government, around 1.4 billion euros could flow into the reserve fund next year. The existing financial reserve was used up completely because of the pandemic.
Focus on active employment promotion
In 2023, 9.6 billion euros, around 20 percent more than will probably be required this year for active employment promotion (excluding short time benefits), will be made available. Of this sum, around 2.2 billion euros is for the promotion of further education, 1.4 billion for unemployment benefit during vocational further education, and 2.8 billion euros for the participation of handicapped people. The budget also covers sufficient means to allow young people to cope adequately with the transition from school to the workplace.
Costs higher for unemployment benefit – lower for short time
The BA has reserved 18.0 billion euros for unemployment benefit, about 1.5 billion euros in excess of the sum which will serve this purpose in the current year. The additional requirements are mainly due to higher payouts on account of higher wages. On the basis of the autumn forecast, the Federal Government has set aside 1.3 billion euros in the next budget for cyclical short time benefits. In the current year, the BA is expected to pay out around 3.8 billion euros for short time benefits. As in this year, 900 million euros have been taken into account for insolvency payments.
Envisaged "citizens' income" reforms, which also affect the employment agencies, have already been taken into account. The BA's budget must subsequently be approved by the Federal Government.
Chairperson of the Administrative Board Christina Ramb stated the following:
"Next year, the BA will face a serious challenge in these uncertain times. Apart from the challenges caused by structural change, war and the pandemic, numerous legislative proposals are earmarked for implementation in 2023 to cope with the situation. Additional measures which require hasty implementation are a considerable burden. We need a sense of proportion, so as not to overtax the BA. It is especially important to the Administrative Board that this considerably higher budget for active employment promotion clearly signals a commitment to more training and further education. It also provides far more support for young people joining the workforce. This is vital to us, because despite the difficult economic situation, everyone is much needed in the labour market. An important factor for the employer representatives in the Administrative Board is that the BA remains stable and resilient. Finding well-qualified personnel for corresponding positions is a continuing challenge, because the demographic situation and lack of skilled workers are matters which also affect the BA. A further decisive factor will be the consistent further development of digitisation and automation, and the optimisation of processes."
Anja Piel, Deputy Chairperson of the Administrative Board, added the following comment: "The approved budget gives the BA the opportunity to fund sensible further training measures. These give a lot of unemployed people a better chance in the labour market, and is an important contribution to accompany the necessary transformation processes and structural changes. So far, the labour market has given stable support to many employees during the crisis, but the number of long-term unemployed persons is still much higher than before the pandemic. It is therefore crucial that we foresee the situation, in other words, that by providing early support we improve the labour market opportunities to avoid long-term unemployment. Another important matter is that the BA continues to have enough manpower to cope with the forthcoming challenges."
Board Chair Andrea Nahles:
"In spite of the tense economic situation, the labour market has so far remained robust, and for the first time since 2019, we can again present a balanced budget. Our focus continues to be active work promotion, so that we can precisely tailor our training. If the labour market remains stable, we can gradually start a new reserve fund, but it will take years until we can provide an effective reserve for difficult times in the labour market."