Other elements of the reform package
Beyond sick leave, the package includes income tax relief worth more than €600 (US$685) for a family with two children, financed partly by raising the top tax rate to 47% from 45% for earners above €280,000, Reuters reported.
The plan also adopts pension commission recommendations, including a capital markets-based pension element and a gradual rise in retirement age, CTV News reported.
Additional measures target industrial competitiveness, including support for the automotive, chemicals and semiconductor sectors, an expanded Deutschlandfonds investment vehicle, and an 8% cut to federal staffing. Economists offered mixed reviews: Deutsche Bank’s Marion Muehlberger called it one of Germany’s “biggest reform packages in decades,” per news.com.au, while DIW president Marcel Fratzscher described it as more symbolic than substantive.
International context
Germany’s move stands apart from the direction other governments are taking on sick leave. Australian Treasurer Jim Chalmers responded to the German changes by pledging his government would keep defending existing entitlements, saying workers should not have to sacrifice pay to take a sick day, according to news.com.au.
Australia’s Minister for Employment and Workplace Relations, Amanda Rishworth, said there was “no intention of changing the current personal leave entitlement settings,” per news.com.au. Australia is separately reviewing whether to expand leave entitlements through a parliamentary inquiry into its National Employment Standards.