Willy Brandt - Chancellor - Chancellor of Domestic Reform

Chancellor of Domestic Reform

Although Brandt is perhaps best known for his achievements in foreign policy, his government oversaw the implementation of a broad range of social reforms, and was known as a "Kanzler der inneren Reformen" ('Chancellor of domestic reform'). According to the historian David Childs, “Brandt was anxious that his government should be a reforming administration and a number of reforms were embarked upon”. Within a few years, the education budget rose from 16 billion to 50 billion DM, while one out of every three DM spent by the new government was devoted to welfare purposes. As noted by the journalist and historian Marion Dönhoff,

“People were seized by a completely new feeling about life. A mania for large scale reforms spread like wildfire, affecting schools, universities, the administration, family legislation. In the autumn of 1970 Jürgen Wischnewski of the SPD declared, ‘Every week more than three plans for reform come up for decision in cabinet and in the Assembly.’ ”

According to Helmut Schmidt, Willy Brandt's domestic reform programme had accomplished more than any previous programme for a comparable period. A number of liberal social reforms were instituted whilst the welfare state was significantly expanded (with total public spending on social programs nearly doubling between 1969 and 1975), with health, housing, and social welfare legislation bringing about welcome improvements, and by the end of the Brandt Chancellorship West Germany had one of the most advanced systems of welfare in the world.

Amongst his achievements as Chancellor were:

• Substantial increases in social security benefits such as injury and sickness benefits, pensions, unemployment benefits, housing allowances, basic subsistence aid allowances, and family allowances and living allowances. In the government’s first budget, sickness benefits were increased by 9.3%, pensions for war widows by 25%, pensions for the war wounded by 16%, and recruitment pensions by 5%. Numerically, pensions went up by 6.4% (1970), 5.5% (1971), 9.5% (1972), 11.4% (1973), and 11.2% (1974). Adjusted for changes in the annual price index, pensions went up in real terms by 3.1% (1970), 0.3% (1971), 3.9% (1972), 4.4% (1973), and 4.2% (1974). Between 1972 and 1974, the purchasing power of pensioners increased by 19%.
• Improvements in sick pay provision.
• An expanded sickness insurance scheme, with the inclusion of preventative treatment.
• The allocation of more funds towards housing, transportation, schools, and communication.
• The index-linking of the income limit for compulsory sickness insurance to changes in the wage level (1970).
• The provision of the right to medical cancer screening to 23.5 million people.
• The incorporation of pupils, students and children in kindergartens into the accident insurance scheme (1971), which benefited 11 million children.
• The Sickness Act of 1970, which provided equal treatment of workers and employees in the event of incapacity for work.
• The introduction of generous public stipends for students to cover their living costs.
• The conversion of West German universities from elite schools into mass institutions.
• Increased maternity leave.
• The introduction of faster pension indexation, with the annual adjustment of pensions brought forward by six months.
• The Farmers’ Sickness Insurance Law (1972), which introduced compulsory sickness insurance for independent farmers, family workers in agriculture, and pensioners under the farmers’ pension scheme, medical benefits for all covered groups, and cash benefits for family workers under compulsory coverage for pension insurance.
• The extension of participation in employer’s health insurance to four million employees.
• The introduction of voluntary retirement at 63 with no deductions in the level of benefits.
• The index-linking of war victim’s pensions to wage increases.
• An increase in spending on research and education by nearly 300% between 1970 and 1974.
• The raising of the school leaving age to 16.
• The provision of “for family-friendly housing” freight or rent subsidies to owners of apartments or houses whose ceiling had been adapted to increased expenses or incomes (1970).
• The introduction of free medical check ups (1971).
• The abolition of fees for higher or further education.
• A considerable increase in the number of higher education institutions.
• The introduction of grants for pupils from lower income groups to stay on at school.
• The introduction of grants for those going into any kind of higher or further education.
• Increases in educational allowances.
• The introduction of automatic pension increases for war widows (1970).
• Greater spending on science.
• The introduction of "Vergleichmieten" ('comparable rents'), a loose form of rent regulation.
• Increased levels of protection and support for low-income tenants and householders, which led to a drop in the number of eviction notices. By 1974, three times as much was paid out in rent subsidies as in 1969, and nearly one and a half million households received rental assistance.
• Increases in public housing subsidies, as characterised by a 36% increase in the social housing budget in 1970 and by the introduction of a programme for the construction of 200,000 public housing units (1971).
• The establishment of a federal environmental programme (1971).
• Reforms to the armed forces, as characterised by a reduction in basic military training from eighteen to fifteen months and a reorganisation of education and training, as well as personnel and procurement procedures.
• The establishment of a women’s policy machinery at the national level (1972).
• The establishment of a Federal Environment Agency (1974) to conduct research into environmental issues and prevent pollution.
• The introduction of redundancy allowances in cases of bankruptcies (1974).
• Improvements in income and work conditions for home workers.
• The introduction of new provisions for the rehabilitation of severely disabled people ("Schwerbehinderte") and accident victims.
• The introduction of guaranteed minimum pension benefits for all West Germans.
• The introduction of fixed minimum rates for women in receipt of very low pensions, and equal treatment for war widows.
• An amendment to the Labour Management Act (1971) which granted workers co-determination on the shop floor.
• The Factory Constitution Law (1971), which strengthened the rights of individual employees “to be informed and to be heard on matters concerning their place of work.” The Works’ Council was provided with greater authority while trade unions were given the right of entry into the factory “provided they informed the employer of their intention to do so”.
• The passage of a law to encourage wider share ownership by workers and other rank-and-file employees.
• An increase in federal aid to sports’ organisations.
• Efforts to improve the railways and motorways.
• A new Factory Management Law (1972) which extended co-determination at the factory level. This Act acknowledged for the first time the presence of trade unions in the workplace, expanded the means of action of the works councils, and improved their work basics as well as those of the youth councils.
• The passing of a law in 1974 to allow for worker representation on the boards of large firms (although this change was not enacted until 1976, after alterations were made).
• The extension of accident insurance to non-working adults.
• The introduction of greater legal rights for women, as exemplified by the standardisation of pensions, divorce laws, regulations governing use of surnames, and the introduction of measures to bring more women into politics.
• The Town Planning Act (1971), which encouraged the preservation of historical heritage and helped open up the way to the future of many German cities.
• An addition to the Basic Law which gave the Federal Government some responsibility for educational planning.
• A big increase in spending on education, with educational expenses per head of the population multiplied by five.
• The passing of the Severely Disabled Persons Act (1974), which obliged all employers with more than fifteen employees to ensure that 6% of their workforce was persons officially recognised as being severely disabled. Employers who failed to do so were assessed 100 DM per month for every job falling before the required quota. These compensatory payments were used to subsidise the adaptation of workplaces to the requirements of those who were severely disabled.
• Amendments to the Federal Social Assistance Act (1974). “Help for the vulnerable” was renamed “help for overcoming particular social difficulties,” and the numbers of people eligible for assistance was greatly extended to include all those “whose own capabilities cannot meet the increasing demands of modern industrial society.” The intention of these amendments was to include especially such groups as discharged prisoners, drug and narcotic addicts, alcoholics, and the homeless. As a result of these changes, people who formerly had to be supported by their relatives were now entitled to social assistance.
• The passing of a Foreign Tax Act, which limited the possibility of tax evasion.
• The Urban Renewal Act (1971), which helped the states to restore their inner cities and to develop new neighbourhoods.
• The lowering of the voting age from 21 to 18.
• Improvements in pension provision for women and the self-employed.
• The Second Modification and Supplementation Law (1970), which increased the allowance for the third child from DM 50 to DM 60, raised the income-limit for the second child allowance from DM 7,800 to DM 13,200, subsequently increased to DM 15,000 by third modification law (December 1971), DM 16,800 by fourth modification law (November 1973), and to DM 18,360 by faith modification law (December 1973).
• The introduction of a new minimum pension for workers with at least twenty-five years’ insurance.
• The Second Sickness Insurance Modification Law (1972), which linked the indexation of the income-limit for compulsory employee coverage to the development of the pension insurance contribution ceiling (75% of the ceiling), obliged employers to pay half of the contributions in the case of voluntary membership, extended the criteria for voluntary membership of employees, and introduced preventive medical check-ups for certain groups.
• The Pension Reform Law (1972), which guaranteed all retirees a minimum pension regardless of their contributions and institutionalized the norm that the standard pension (of average earners with forty years of contributions) should not fall below 50% of current gross earnings. The 1972 pension reforms improved eligibility conditions and benefits for nearly every subgroup of the West German population. The income replacement rate for employees who made full contributions was raised to 70% of average earnings. The reform also replaced 65 as the mandatory retirement age with a “retirement window” ranging between 63 and 65 for employees who had worked for at least thirty-five years. Employees who qualified as disabled and had worked for at least thirty-five years were extended a more generous retirement window, which ranged between the ages of 60 and 62. Women who had worked for at least fifteen years (ten of which had to be after the age of age 40), and the long-term unemployed were also granted the same retirement window as the disabled. In addition, there were no benefit reductions for employees who had decided to retire earlier than the age of 65. The legislation also changed the way in which pensions were calculated for low-income earners who had been covered for twenty-five or more years. If the pension benefit fell below a specified level, then such workers were allowed to substitute a wage figure of 75% of the average wage during this period, thus creating something like a minimum wage benefit.
• The introduction of a pension reform package, which incorporated an additional year of insurance for mothers.
• The liberalisation of the penal code.
• The Housing Construction Modification Law of 1971, which increased the income-limit for access to low rent apartments under the social housing programme from 9,000 DM to 12,000 DM per annum plus 3,000 DM (instead of 2,400) for each family member. The law also introduced special subsidies to reduce the debt burden for builders not surpassing the regular income-limit by more than 40%. Under a 1973 law, the limits were increased to 1,000 DM plus 9,000 DM and 4,200 DM for additional family members.
• An increase in tax-free allowances for children, which enabled 1,000,000 families to claim an allowance for the second child, compared to 300,000 families previously.
• The Second Housing Allowance Law of December 1970, which simplified the administration of housing allowances and extended entitlements, increased the income limit to 9,600 DM per year plus 2,400 DM for each family member, raised the general deduction on income to determine reckonable income from 15% to 20%, allowance rates listed in tales replacing complicated calculation procedure based on “bearable rent burdens.”
• The exemption of pensioners from paying a 2% health insurance contribution.
• The Hospital Financing Law (1972), which secured the supply of hospitals and reduced the cost of hospital care, “defined the financing of hospital investment as a public responsibility, single states to issue plans for hospital development, and the federal government to bear the cost of hospital investment covered in the plans, rates for hospital care thus based on running costs alone, hospitals to ensure that public subsidies together with insurance fund payments for patients cover total costs”.
• A new fund of 100 million marks for disabled children.
• The Rent Improvement Law (1971), which strengthened the position of tenants. Under this legislation, notice was to be ruled illegal “where appropriate substitute accommodation not available; landlords obliged to specify reasons for notice.”
• The granting of equal rights to illegitimate children (1970).
• The Eviction Protection Law (1971) which established tenant protection against rent rises and notice. The notice was only lawful if in the “justified interest of the landlord. Under this law, higher rents were not recognised as “justified interest.”
• A law for the creation of property for workers, under which a married worker would normally keep up to 95% of his pay, and graded tax remission for married wage-earners applied up to a wage of 48,000 marks, which indicated the economic prosperity of West Germany at that time.
• The Benefit Improvement Law (1973), which made entitlement to hospital care legally binding (entitlements already enjoyed in practice), abolished time limits for hospital care, introduced entitlement to household assistance under specific conditions, and also introduced entitlement to leave of absence from work and cash benefits in the event of a child’s illness.
• Increased allowances for retraining and advanced training and for refugees from East Germany.
• The Seventh Modification Law (1973), which linked the indexation of farmers’ pensions to the indexation of the general pension insurance scheme.
• An increase in federal grants for sport.
• The Third Modification Law (1974), which extended individual entitlements to social assistance by means of higher-income limits compatible with receipt of benefits and lowered age limits for certain special benefits. Rehabilitation measures were also extended, child supplements were expressed as percentages of standard amounts and were thus indexed to their changes, and grandparents of recipients were exempted from potential liability to reimburse expenditure of social assistance carrier.
• An amendment to a federal civil service reform bill (1971) which enabled fathers to apply for part-time civil service work.
• The allocation to local communities of matching grants covering 90% of infrastructure development. This led to a dramatic increase in the number of public swimming pools and other facilities of consumptive infrastructure throughout West Germany.
• The Second Eviction Protection Law (1972) which made the tenant protection introduced under the Eviction Protection Law of 1971 permanent. Under this new law, the notice was only lawful where the landlord proved justified personal interest in the apartment. In addition, rent increases were only lawful if not above normal comparable rents in the same area.
• A modernization of the federal crime-fighting apparatus.
• The Third Social Welfare Amendment Act (1974), which brought considerable improvements for the handicapped, those in need of care, and older persons.
• The introduction of a matching fund program for 15 million employees, which stimulated them to accumulate capital.
• A much needed school and college construction program.
• The Industrial Relations Law (1972) and the Personnel Representation Act (1974), which not only broadened the rights of employees in matters which immediately affected their places of work, but also improved the possibilities for codetermination on operations committees, together with access of trade unions to companies. In 1972, the rights of works councils to information from management were not only strengthened, but works councils were also provided with full codetermination rights on issues such as working time arrangements in the plant, the setting of piece rates, plant wage systems, the establishment of vacation times, work breaks, overtime, and short-time work. Legislation was passed which acknowledged for the first time the presence of trade unions in the workplace, expanded the means of action of the works councils, and improved their work basics as well as those of the youth councils.
• The introduction of substantial federal benefits for farmers.
• The passage of a progressive anticartel law.
• The introduction of legislation which ensured continued payment of wages for workers disabled by illness (1970).
• A modernization of the armed forces establishment.
• The introduction of postgraduate support for highly qualified graduates, providing them with the opportunity to earn their doctorates or undertake research studies.
• The introduction of a contributory medical service for 23 million panel patients.
• The Third Law for the Liberalization of the Penal Code (1970), which liberalized “the right to political demonstration”.
• The introduction of free hospital care for 9 million recipients of social relief.
• The lowering of the age of eligibility for political office to twenty-one.
• Increases in the pensions of 2.5 million war victims.
• The lowering of the office age of majority to eighteen (March 1974).
• The abolition of fixed prices for branded products by law (January 1974). This meant that manufacturers’ recommended prices were not binding for retailers.
• An increase in the number of teachers.
• A strengthening of the consumer’s right of withdrawal in case of hire purchase (March 1974).
• The passage of a law which guaranteed “amnesty in minor offences connected with demonstrations.”
• The introduction of better protection for homeworkers, together with an extension of paid annual leave and an extension of the dismissal deadline.
• A new employment law for young people, including providing for the introduction of the five-day week of 40 hours and longer holidays.
• An 18.1% increase in building permits for social housing units from 1970 to 1971.
• A bill which introduced entitlement for the victims of violence to compensation under the Federal Supply Act, “if the offender or not determined or to pay compensation can not be used.”
• The Border Zone Assistance Act of 1971, which increased levels of assistance to the declining zonal peripheral area.
• The Occupational Safety Act (1973), which required employers to provide company doctors and safety experts.
• The attainment of a lower rate of inflation than in other industrialised countries at that time.
• A rise in the standard of living, helped by the floating and revaluation of the mark. This was characterised by the real incomes of employees increasing more sharply than incomes from entrepreneurial work, with the proportion of employees’ incomes in the overall national income rising from 65% to 70% between 1969 and 1973, while the proportion of income from entrepreneurial work and property fell over that same period from just under 35% to 30.%