Initiatives to reduce bureaucracy

In its coalition agreement, the federal government announced a new law to reduce bureaucracy. In this context, the State Secretary Committee on “Better Regulation and Reducing Bureaucracy” launched a survey of associations, which has since received a total of 442 concrete proposals for reducing bureaucracy from 57 associations. Recently, on April 21, 2023, the Bundestag referred a motion for a resolution by the Union parties to the Economic Affairs Committee for further consideration.

Background
To promote a state’s ability to act, an efficient bureaucracy and a high-performing administration are necessary. This, in turn, requires processes and rules that are as simple as possible and easily digitizable. According to business surveys, bureaucratic burdens in Germany rank among the most significant obstacles to economic growth. Excessive documentation, reporting, and record-keeping requirements, lengthy procedures, and enforcement and implementation problems within government agencies are a burden on the economy—this applies to large corporations as well as smaller medium-sized companies and the self-employed. Apart from that, German citizens express frustration with the bureaucratic burden.

What has happened
so far
The first tangible measure to reduce bureaucracy came with the Third SME Relief Act (MEG III, Federal Law Gazette 2009 I p. 550) in March 2009. It led, for example, to simplifications in tax and commercial law, as well as the reduction of record-keeping and documentation requirements. Since then, however, not much has happened. The new Bureaucracy Relief Act is long overdue.

In February, the Bundestag debated the prioritization of economic and regulatory policy and referred the bill to the Economic Affairs Committee—here, too, no concrete results have emerged so far.

What’s next?
The current motion (BT-Drs. 20/6408) proposes shortening the retention periods for documents in the areas of tax and commercial law to align with timely tax audits. In labor and social law, the mini-job threshold is to be raised from 520 to 600 euros and linked to general wage trends. Documentation requirements for mini-jobbers that are not strictly necessary are to be eliminated. In the area of general economic policy, a “start-up protection zone” is among the measures planned. It is intended to exempt young companies from bureaucratic regulations as much as possible during the first two years after their founding.

Assessment
There is broad political consensus that reducing bureaucracy is urgently needed. After all the preparations, it is now time to take action. However, the idea that a new Bureaucracy Relief Act can be presented by June—as demanded, among others, by the AfD parliamentary group—seems unrealistic, given that there are over 440 proposed improvements, of which the Federal Statistical Office has classified over 100 as top priority.