2023-09-27 12:43:31
Get France out of debt while fighting inflation and investing in the energy transition: the government presented on Wednesday September 27 a draft budget for 2024 which responds to these “three challenges”before parliamentary debates which promise to be eventful.
The government is faced with a difficult equation in its draft budget, the first to want to turn the page on the health and energy crises. Some 16 billion savings are planned for next year as well as a new tax on motorways, but in a context of a drastic increase in interest rates.
However, the debates promise to be electric in Parliament. Deprived of an absolute majority in the Assembly and probably of support in the opposition, the government could resolve to an adoption without a vote by resorting, as last year, to article 49.3 of the Constitution.
In this context, the Minister of Economy and Finance Bruno Le Maire called on the three components of the majority to ” responsibility “ and to speak with the same voice, a year after the heated debates provoked by a MoDem amendment on the taxation of « superprofits ».
Less spending
The government wants to give guarantees of budgetary seriousness, faced with a debt which has exceeded 3,000 billion euros and a deficit well outside the European standards which places France among the bad performers in the euro zone.
It is for him a question of “credibility” before the verdict in the coming weeks from rating agencies on France’s financial health. Most of the savings will come from the gradual elimination of exceptional measures to reduce the electricity bill of households and businesses (around 14.5 billion euros).
To this will be added reductions in aid for employment policy (1 billion), 700 million from the unemployment insurance reform, the postponement of part of the reduction in production taxes (CVAE) for businesses, the removal of the tax advantage for non-road diesel or the increase in the penalty on polluting vehicles.
Bruno Le Maire also said he was open, during future debates, to a reduction from 71 to 50% of the tax reduction for furnished tourist rentals, such as Airbnb.
In total, state spending will increase from 496 to 491 billion euros, excluding debt charges. The objective is to reduce the deficit from 4.9% of GDP this year to 4.4% in 2024 – a figure tackled as ” optimistic “ by the High Council of Public Finances – then to 2.7% in 2027, below the European limit of 3%.
Debt would decline less resolutely, stable at 109.7% of GDP in 2024 to reach 108.1% at the end of the five-year term, far above the European maximum (60%).
Purchasing power
But if it wishes to tighten the purse strings a little, the executive intends to continue to position itself as a defender of purchasing power in the face of inflation which is starting to ebb but which remains a politically sensitive subject.
Faced with a new surge in prices at the pump, he will bring out the checkbook and offer compensation of €100 to the poorest households going to work by car, at a cost of 430 million euros.
The inflation indexation of the income tax scale (4.8%), pensions (revalued by 5.2% on January 1) and social benefits (4.6% on April 1) will weigh 25 billion euros.
There are also other constraints slowing down the reduction in spending, first and foremost a debt burden which will increase to more than 52 billion euros next year and risks becoming in the future the first budgetary item in front of the ‘National Education.
The strategy of “rearmament of public services” also limits room for maneuver, with nearly 5 billion additional credits for the army, police and justice, and 3.9 billion for school education, as well as nearly 8,300 additional state agents.
The ecological transition will benefit from an additional 7 billion euros in 2024. On the revenue side, a tax on motorways and airports will bring in 600 million per year, while the fight against tax and social fraud will be strengthened.
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