Rising Bureaucracy Costs Prompt Calls for Reform

The start of the traffic light coalition government in Germany has been marked by a significant increase in bureaucratic demands, according to Lutz Goebel, Chairman of the National Regulatory Control Council (NKR). Goebel highlighted the burdensome nature of recent regulations, such as the Building Energy Act, commonly referred to as the "Heizungsgesetz," and the Supply Chain Act, influenced by European mandates. Despite the introduction of the fourth Bureaucracy Reduction Act, which is set to take effect in January, Goebel believes it is insufficient to address the overarching issue.

Bureaucracy currently costs the German economy a staggering 65 billion euros annually. Goebel advocates for a 25% reduction in bureaucracy over four years, which he sees as a crucial step toward alleviating the economic burden. The NKR also suggests incorporating a reduction of the Supply Chain Due Diligence Act into any 100-day program established by a new chancellor. Goebel proposes that OECD countries be exempt from certain compliance requirements concerning human rights violations, and suggests that suppliers could gain certification to demonstrate compliance.

The NKR further recommends the creation of a unified questionnaire for businesses to streamline the process and save time. Goebel points out inefficiencies in data collection, where companies repeatedly supply information that the government could retrieve from existing registers. Therefore, the NKR calls for a modernization of these registers to be prioritized in the next legislative period. Additionally, the council urges the government to consider granting a veto right on laws deemed overly bureaucratic unless they pass a digital efficiency check. These reforms are seen as essential to reduce bureaucratic costs and enhance economic efficiency.