_ J.C. Kofner, Spokesperson, State Expert Committee on “Finance and Taxes”, AfD Bavaria; Economist, MIWI Institute. Munich, November 21, 2024.
Bavaria’s Economy in Deep Crisis – An Unprecedented Decline
The Bavarian economy is in the deepest crisis since World War II. An historically unparalleled deindustrialization is underway, and our Free State is in danger of transforming from Europe’s leading industrial hub into a gigantic industrial museum.
The production index in manufacturing is already a quarter below the pre-crisis trend.[1] According to a survey by the IHK, one in four industrial companies and half of large corporations plan to relocate abroad.[2] Even long-established flagship companies in Bavaria’s automotive, machinery, and chemical industries, some dating back to the Imperial era, are announcing drastic layoffs, plant closures, and relocations. Bavaria’s economic engine is being dismantled piece by piece.
Since 2019, monthly insolvencies have doubled.[3] Over 31,000 industrial jobs have been threatened by layoffs in Bavaria’s manufacturing sector since 2022, half of which—14,000—are in the automotive industry. Real wages are still 4 percent below the pre-crisis level,[4] while producer prices have risen by more than a third since 2019.[5]
Political Class Guilty of the Economic Crisis
Deindustrialization is self-inflicted. The fanatical green policies, implemented by the CSU, Free Voters, and the coalition government, are primarily responsible for this crisis. Urgent action is needed in four core areas: energy, taxes, bureaucracy, and skilled labor.
The “Energy Transition” Leads to Explosive Costs
The so-called “energy transition” is leading to massive increases in electricity[6] and heating costs.[7] The CSU decided to phase out nuclear power and introduced the CO2 tax in 2021, while the Free Voters failed to prevent the dismantling of nuclear power plants. The Free State has gone from being a net exporter of electricity to a net importer, and Bavaria already has a 3-gigawatt supply gap.[8] At the same time, the coalition government has approved a heating ban and the destruction of gas infrastructure—industries only thrive where there is an adequate supply of affordable energy.
High Tax Burden – An Almost Unbearable Burden
Labor costs in Bavaria[9] are a fifth higher than in the U.S.[10] and three times higher than in China.[11] Nearly half of a German industrial worker’s income goes toward taxes and social contributions—ranking second among 38 OECD countries.[12] Companies pay around 30 percent in taxes, making it one of the highest rates in the world.[13] The tax quota is almost 40 percent, placing Bavaria in the upper quarter of OECD countries,[14] while the state share is just under 50 percent, well above China’s level.[15]
Bureaucratic Madness and Economic Control
One bureaucratic monster after another. The CSU’s supply chain law demands answers to 437 questions from companies, threatening fines of up to 8 million euros for non-compliance. The Bavarian solar roof mandate, the repeatedly demanded ban on combustion engines by Söder, and a flood of regulations are leading the local industry to ruin. The coalition government exacerbates this with costly regulations such as the Whistleblower Protection Act, Evidence Act, and CSRD Directive, imposing absurd reporting and documentation requirements.
Skilled Labor Shortage – Self-Inflicted
The skilled labor gap in Bavaria has now reached 150,000 positions. Three out of five companies cannot fill their open vacancies.[16] Politically encouraged mass immigration does not alleviate the problem, as it primarily enters the social systems and not the economy. At the same time, Pisa results have deteriorated since 2012,[17] and more than 80,000 skilled German workers have left Bavaria since then.[18]
A Fundamental Policy Shift for Bavarian Industry
The CSU, Free Voters, and the coalition government advocate for a “business as usual” approach to deindustrialization policies that threaten Bavaria’s industrial base. Billions in “green” subsidies are not a solution—in fact, they create costly dependencies on government funding and weaken the international competitiveness of Bavarian companies. What is needed is a true shift toward a more market-driven economy, more innovation, and investment-friendly policies to secure and sustainably strengthen Bavaria as an attractive industrial location. The proposed measures focus on four core areas: affordable and base-load capable energy supply, drastic tax cuts, the elimination of bureaucratic monsters, and securing skilled labor from within:
Necessary Measures at the State Level in Bavaria
Affordable, Base-Load Capable Energy
- The dismantling of Bavaria’s nuclear power plants must be stopped immediately.
- No forced promotion of weather-dependent wind and solar energy.
- Promotion and easing of construction laws for the construction of base-load capable power plants such as gas, biogas, geothermal, and hydropower plants.
Tax Relief
- Establishment of special economic zones in particularly important regions such as the Bavarian Chemical Triangle. The state should finance the reduction of municipal trade tax rates in these zones.
- Exemption from property transfer tax for the first self-used (business) property.
- Abolition of inheritance and gift tax.
- No introduction of the so-called “water cent.”
Bureaucratic Reduction
- Abolition of the Bavarian Climate Protection Act.
- End of the solar roof mandate.
- Immediate cessation of any clawbacks for corona subsidies.
Securing Skilled Labor from Within
- Return program for emigrated German skilled workers: “Kimm Hoam Program”[19].
- State-financed driving license training for apprentices.
- Increase the share of STEM subjects (science, technology, engineering, and mathematics) in the Bavarian education system from an average of 25 to 40 percent.[20]
- Streamlining the Bavarian state apparatus to make 50,000 administrative employees, added since 2017,[21] available to the private sector.
Necessary Measures at the Federal Level
Base-Load Capable and Affordable Energy Supply
- Re-entry into nuclear power.
- Continuation of coal and natural gas usage; clarification of the destruction and reactivation of the Nord Stream pipelines; completion of South Stream.
- Bureaucratic simplification and promotion for biogas farmers to improve connections to the gas network.
- Abolition of the CO2 tax and a drastic reduction of electricity and energy taxes for all.
Tax Cuts – Introduction of AfD’s “Tax Reform 25”
The AfD calls for a tax reform that abolishes income and payroll taxes, the solidarity surcharge, trade tax, corporation tax, and capital gains tax. Instead, a single income tax of a maximum of 25 percent on labor, profits, and capital should be introduced. The exemption limit should rise to 15,000 euros per person, with family splitting and an additional 12,000 euros per child.[22] Sole proprietors and SMEs should only pay taxes on withdrawn profits to encourage investment.
Abolishing Bureaucratic Monsters
Abolition of numerous bureaucratic regulations from Berlin and Brussels, such as the combustion engine ban, the supply chain law, the climate protection act, the CSRD directive, the energy efficiency act, the evidence law, the whistleblower protection law, and the building energy law.
Securing Skilled Labor Without Mass Immigration
- Streamlining the federal government to make 160,000 additional administrative staff[23] available to the economy since Merkel’s tenure.
- Incentives to reverse the annual net migration of 46,600 highly skilled Germans; nearly 1 million skilled workers emigrated between 2005 and 2023.
- Controlled immigration policy focusing on highly qualified net taxpayers and students according to labor market needs.
- Education offensive: Promotion of qualification enhancement for over 1 million unskilled workers in Germany without jobs.
- Incentives to limit non-indexed abortions; potentially 3.3 million additional workers in 30 years.
- Tax benefits, housing support, and childcare to increase the birth rate (potential increase of 12.5 million Germans in 30 years)[24].
- Focus on digitization and robotization; automation could reduce the demand for 1.4 million low-skilled jobs (e.g., cleaning, logistics, agriculture).[25]
Sources
[1] Statistisches Bundesamt (Destatis) (2024). Produktionsindex Verarbeitendes Gewerbe. URL: https://www.destatis.de/DE/Themen/Wirtschaft/Konjunkturindikatoren/Produktion/kpi112.html
[2] DIHK – Deutscher Industrie- und Handelskammertag (2024). Auswertung Energiewende-Barometer 2024. URL: https://www.dihk.de/resource/blob/120386/1681c61b9a91ad07af50f85f0ff77bcb/auswertung-energiewende-barometer-2024-data.pdf.
[3] Bayerisches Landesamt für Statistik (2024). Wirtschaft und Handel – Unternehmen in Bayern. URL: https://www.statistik.bayern.de/statistik/wirtschaft_handel/unternehmen/index.html#link_2
[4] Statistisches Bundesamt (2024). Reallohnentwicklung – Vierteljährliche Übersicht. URL: https://www.destatis.de/DE/Themen/Arbeit/Verdienste/Realloehne-Nettoverdienste/Tabellen/reallohnentwicklung-quartal.html
[5] Statistisches Bundesamt (2024). Erzeugerpreisindex für gewerbliche Produkte – Überblick. URL: https://www.destatis.de/DE/Themen/Wirtschaft/Preise/Erzeugerpreisindex-gewerbliche-Produkte/_inhalt.html
[6] Bundesverband der Energie- und Wasserwirtschaft (2024). BDEW-Strompreisanalyse. URL: https://www.bdew.de/service/daten-und-grafiken/bdew-strompreisanalyse/.
[7] Destatis (2024). Wärmepreisindex. URL: https://www.destatis.de/DE/Themen/Wirtschaft/Preise/Verbraucherpreisindex/Tabellen/Waermepreisindex.html.
[8] VBW (2024). Stromwirtschaft. URL: https://www.vbew.de/vbew/zahlen-und-fakten/stromwirtschaft
[9] Schröder, C. (2024). Kostenwettbewerbsfähigkeit der deutschen Industrie in Zeiten multipler Krisen. IW Köln. URL: https://www.iwkoeln.de/studien/christoph-schroeder-kostenwettbewerbsfaehigkeit-der-deutschen-industrie-in-zeiten-multipler-krisen.html
[10] Germany Trade & Invest (2024). Lohnkosten – USA. URL: https://www.gtai.de/de/trade/usa/wirtschaftsumfeld/lohnkosten-614940
[11] Germany Trade & Invest (2024). Lohnkosten – China. URL: https://www.gtai.de/de/trade/china/wirtschaftsumfeld/lohnkosten-234416
[12] OECD (2024). Taxing Wages. URL: https://www.compareyourcountry.org/taxing-wages/en/1/all/default
[13] OECD (2024). Corporate Tax Data Explorer. URL: https://data-explorer.oecd.org/vis?tenant=archive&df[ds]=DisseminateArchiveDMZ&df[id]=DF_TABLE_II1&df[ag]=OECD
[14] OECD. (2023). OECD: Abgabenquoten in den Mitgliedsstaaten im Jahr 2022. URL: https://de.statista.com/statistik/daten/studie/157383/umfrage/abgabenquoten-ausgewaehlter-staaten/
[15] Statista (2024). Staatsquoten in Industrie- und Schwellenländern. URL: https://de.statista.com/statistik/daten/studie/329446/umfrage/staatsquoten-in-industrie-und-schwellenlaendern
[16] KOFA (2024). Ländersteckbrief Bayern. URL: https://www.kofa.de/media/Publikationen/Laendersteckbriefe/Bayern.pdf
[17] Statista (2024). Themenbereich PISA-Studie. URL: https://de.statista.com/themen/1200/pisa-studie/
[18] Destatis (2024). Wanderungen zwischen Deutschland und dem Ausland: Bundesländer, Jahre, Nationalität, Geschlecht.
[19] Meier J. (2024). Johannes Meier: Fachkräftemangel endlich aktiv angehen – „Kimm Hoam“-Programm der AfD umsetzen. AfD-Fraktion im Bayerischen Landtag. URL: https://www.afd-landtag.bayern/2024/03/22/johannes-meier-fachkraeftemangel-endlich-aktiv-angehen-kimm-hoam-programm-der-afd-umsetzen/
[20] Bayerischer Landtag (2024). Antwort auf die Schriftliche Anfrage: Drucksache 19/2230. URL: https://www.bayern.landtag.de/www/ElanTextAblage_WP19/Drucksachen/Schriftliche%20Anfragen/19_0002230.pdf
[21] Bayerisches Landesamt für Statistik (2013). Beschäftigte im öffentlichen Dienst in Bayern 2013. URL: https://www.statistik.bayern.de/mam/statistik/haushalte_steuern/personal/besch%C3%A4ftigte_im_%C3%B6ffentlichen_dienst_in_bayern_2013.pdf | Bayerisches Landesamt für Statistik (2023). Beschäftigte im öffentlichen Dienst in Bayern 2023. URL: https://www.statistik.bayern.de/mam/statistik/haushalte_steuern/personal/besch%C3%A4ftigte_im_%C3%B6ffentlichen_dienst_in_bayern_2023.pdf
[22] Kofner J.C. (2024). Wer wird entlastet, wer zahlt mehr? Steuerkonzepte von SPD und AfD im Vergleich. Freilich Magazin, MIWI Institut. URL: https://www.freilich-magazin.com/wirtschaft/wer-wird-entlastet-wer-zahlt-mehr-steuerkonzepte-von-spd-und-afd-im-vergleich
[23] Destatis (2006). Personal des öffentlichen Dienstes. 2005. URL: https://www.statistischebibliothek.de/mir/servlets/MCRFileNodeServlet/DEHeft_derivate_00007178/2140600057004.pdf | Destatis (2022). Personal des öffentlichen Dienstes. 2021. URL: https://www.destatis.de/DE/Themen/Staat/Oeffentlicher-Dienst/Publikationen/Downloads-Oeffentlicher-Dienst/personal-oeffentlicher-dienst-2140600217004.pdf?__blob=publicationFile
[24] Hier und die Maßnahmen davor: Kofner J.C. (2024). Fachkräftesicherung für Deutschland: Lösungsprogramm von Rechts. MIWI Institut. URL: https://kofner.de/fachkraeftesicherung-fuer-deutschland-loesungsprogramm-von-rechts
[25] Kofner J.C. (2024). Auf- und Ausbau der deutschen Roboterindustrie aus rechter Perspektive. MIWI Institut. URL: https://kofner.de/auf-und-ausbau-der-deutschen-roboterindustrie-aus-rechter-perspektive