Specially Allocated Funds Ensure More Investment in the Future

A new study by ZEW Mannheim shows that 20 per cent of the 2023 federal budget was spent on future-related expenditures. This share had previously fallen to 18.2 per cent during the COVID-19 pandemic. This figure comes from an indicator developed by ZEW called the future ratio (Zukunftsquote), which measures the proportion of expenditure that is highly relevant for future endeavours. The share of funds allocated for the future proved to be above average. The Digital Infrastructure Special Fund and the Climate and Transformation Fund were particularly future-oriented.

“The special funds of recent years have supported the federal budget’s capability to plan for the future. The Federal Constitutional Court’s decision that ended the possibility of financing secondary budgets using debt has posed a major challenge. Therefore, the core budget should place a larger focus on future expenditures in order to prevent a long-term decline in the future ratio,” explained Professor Friedrich Heinemann, head of ZEW’s “Corporate Taxation and Public Finance” Research Unit. “The future ratio as a measure of the federal budget’s preparedness for the future overcomes the vagueness of the classic investment ratio, as it classifies all expenditure items according to their focus on the future. It includes not only capital in kind, but also human and natural capital and even technical knowledge,” added Dr. Albrecht Bohne, researcher in ZEW’s “Corporate Taxation and Public Finance” Research Unit.