2024-12-11 17:15:00
Entering unknown constitutional territory. The special bill (PLS) presented on Wednesday 11 December to the Council of Ministers has in fact no precedent: never has a resigning government been forced to pass an emergency law so intended to compensate for the impossibility of promulgating a budget law before 31 December.
“The text will be difficult to amend because, as the Council of State explains, new provisions cannot be adopted with respect to the 2024 finance law”insists the Minister of Public Accounts, Laurent Saint-Martin. Indexing the income tax scale to inflation (which should allow 380,000 tax families to become tax-free and another 17 million not to see a tax increase) would therefore not be possible.
No new investments
“Only the financial law for 2025 will be able to do this indexation”assures Bercy, placing the responsibility on the next government. Who will need to act quickly: the 2025 budget must be adopted “in the first quarter” so that the new scale is taken into account when filing tax returns.
Failure to vote on the budget in 2024 will, however, have concrete consequences. If they were voted on in 2025, the planned measures on high incomes or corporate profits could thus be considered retroactive and censored by the Constitutional Council. And some tax credits expiring on December 31 (such as the Innovation Tax Credit) cannot be renewed.
On the expenditure front, the Constitution provides that, alongside the special law, the Government can open the corresponding appropriations by decree “rated services” in 2024. Or “a minimum level of essential credits to allow the functioning of the State and public services under the conditions of the previous year”explains Laurent Saint-Martin. “We will not be able to make new investments or discretionary spending”adds Bercy.
Discussion from Monday in the Assembly
Therefore, the staff increases planned by the government are suspended until the adoption of a finance law for 2025, as are measures for farmers or the one billion euro loan to New Caledonia. Funding for public broadcasting will be maintained, “but there cannot be new investment projects”warns Bercy.
As regards local authorities, some state contributions will be suspended, such as the contribution to equipment for rural areas (but not the overall contribution to operation), as well as any new subsidies from the Green Fund. Finally, waiting for all the measures envisaged by the planning laws, including, for the Ministry of Defence, almost 30 billion and the recruitment of 700 soldiers.
This finance bill will be studied next Monday in the Assembly, and probably on Wednesday in the Senate. If a new prime minister were appointed by that date, but without nomination by the government, another unprecedented situation would be created, with a bench of ministers occupied both by Matignon’s new guest and by ministers still resigned in charge of defending him text.
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