The special law that will allow the state apparatus to function in the absence of a budget is “ready”, the outgoing Budget Minister Laurent Saint-Martin assured on Monday, adding that it would be enough to bring together a Council of Ministers to draw up the text to be presented.
This special law, promised by Emmanuel Macron before mid-December, could be carried out “by the outgoing government or by a new government”, specified Laurent Saint-Martin.
It should make it possible to avoid the “shutdown”, i.e. administrative paralysis, by renewing the budget allocations for the year 2024 for the following year. It will also be used to collect taxes starting from 1 January 2025.
“The special law cannot index the income tax according to its inflation scale,” the minister clarified,referring to a constitutional impossibility. For their part, pensions will be well indexed “no matter what” by the Social Security Code, synonymous with revaluation.
How will the indexing of pensions under the special law impact retirees in France?
Interview wiht Budget Expert: Understanding the implications of France’s Special Law for 2024 Budget
Time.news Editor: Thank you for joining us today. With the recent proclamation from outgoing Budget minister Laurent Saint-Martin regarding the special law for the state’s budget operations, could you explain what this law entails and its importance?
Expert: Thank you for having me. The special law is essentially a contingency measure that will allow the state apparatus to continue functioning without a formally passed budget for 2024. It’s designed to avoid administrative paralysis or what many refer to as a “shutdown.” By renewing budget allocations for the following year, it ensures that government agencies can operate smoothly. This law is especially notable because it was promised by President Emmanuel Macron before mid-December, which underscores the urgency of the situation.
Time.news Editor: What are the main components of this special law that we should be aware of?
Expert: The law’s primary function is to continue the operational budget from 2024 into 2025, which includes the collection of taxes beginning January 1, 2025. One significant point to note,as Minister Saint-Martin mentioned,is that while pensions will be indexed to ensure revaluation,the law will not permit the indexing of income tax according to inflation. This limitation arises from constitutional constraints, but it highlights the administration’s efforts to maintain social security without compromising other fiscal policies.
Time.news Editor: This sounds critical for the continuity of government services.Could you elaborate on how the law will impact citizens, especially concerning taxation and pensions?
Expert: Absolutely. For citizens, the continuity of services is vital. The special law allows for the seamless collection of taxes,which is crucial for funding public services. On the pensions front, since the law ensures that pensions will continue to be indexed in line with the Social Security Code, retirees can expect their payments to be adjusted upwards irrespective of broader tax changes. This stability in pensions is essential for many citizens who rely on those funds without the worry of inflation eroding their purchasing power.
Time.news Editor: There seems to be an emphasis on both stability and strategic necessity. What practical advice would you give to readers who are concerned about how these changes might affect their finances?
Expert: I would advise readers to stay informed about developments related to the special law and its implications. Understanding how the budget allocations and tax laws might change can help individuals and families prepare for potential economic shifts. Moreover, maintaining an open dialog with financial advisors can provide tailored strategies in managing personal finances amid these transitions. Preparing for changes in income tax rates and knowing how pension adjustments may affect their retirement planning are also prudent steps.
Time.news Editor: Thank you for your insights. As we approach the implementation of this special law, it’s essential for both government operations and everyday citizens to navigate these changes thoughtfully.
expert: It has been my pleasure. Awareness and proactive management are key to ensuring that these developments lead to beneficial outcomes for everyone involved.