Budget 2024: the State details its ways of saving

New piece in the puzzle of the 2024 budget: the government presented Monday the results of its “review of public expenditure” and could in particular attack the cash flow of hundreds of state operators to save money. While France’s public debt recently exceeded 3,000 billion euros, the administrations and the general inspectorates of finance (IGF) and social affairs (Igas) were called upon to suggest savings in twelve areas of public action. Their conclusions, “a basis for reflection to enrich the work of budgetary programming”, were to be transmitted Monday morning to the parliamentarians, who have just left the benches of the two assemblies for the summer break.

Main lesson of the report, the administration has identified “2.5 billion euros of” potential cash surplus “within state operators such as Météo France or Pôle emploi. “In the short term, the finance law (which will be presented in September, editor’s note) must adjust in certain cases the direct and indirect financing of the State to operators to reduce the surpluses”, specifies this “report for the evaluation of the quality of public action”.

Reduced energy prices and housing taxation in the viewfinder

As mentioned in recent weeks, the government is also considering gradually aligning, “between 2024 and 2030, the reduced excise tariffs on energy from which several economic sectors benefit on the normal diesel tariff”. The reduced rates enjoyed by players in the construction industry, agriculture and the transport of goods should thus disappear, with a “first step” from the 2024 budget, the Ministry of the Economy told the press.

The report published on Monday also suggests removing “the intermediate VAT rate of 10% on (housing improvement) works other than energy renovation” and ending “local tax exemptions favorable to soil artificialisation”. Finally, it confirms the avenues already put forward by the government to reduce public spending on housing, namely the refocusing of the zero-rate loan and the abolition of the Pinel device for a saving of two billion euros in the long term.

Reduction of 2 billion euros in household taxes by 2027

The publication of the report comes a month after the Assises des finances publics, a meeting already intended to identify the main avenues for savings for Emmanuel Macron’s second five-year term, but boycotted by the main associations of local elected officials. At the beginning of July, it was the Court of Auditors which made its contribution by recalling its recipes to improve the quality of expenditure in nine areas of public action.

It now remains to be seen how parliamentarians will welcome the tracks of advanced economies on Monday, when the government has a relative majority in the National Assembly and was forced last fall to draw a litany of 49-3 to forcefully adopt its 2023 budget.

An additional budgetary constraint, President Emmanuel Macron confirmed on TF1 and France 2 on Monday that the government would lower household taxes by 2 billion euros by the end of the five-year term in 2027. The Head of State also seems inclined to continue the reduction in production taxes such as the CVAE, already reduced to the tune of four billion euros in 2023 and supposed to disappear completely in 2024, “to allow companies, in particular the most industrial ones, to make more and hire more.”

Schedule of savings to be specified

The timetable for the savings suggested by the administration remains to be specified, Bercy having again insisted on Monday on its desire to support the economic players concerned by the planned cuts. On the daily allowances (IJ) paid by Health Insurance, whose administration suggests improving monitoring, “there is a desire to move forward this year”, hammered Bercy. “We want to move forward quickly” on the cash flow of operators, also insisted the ministry.

But some recommendations made by the report are more vague: the system of free jobs, which could give rise to “significant windfall effects”, would thus benefit from being “transformed and refocused”, without further details. “Two expenditure reviews do not result in immediately mobilisable savings, one devoted to the expenditure of hotel nights for emergency accommodation and the other to the real estate expenditure of the social security funds”, further underlines the administration.

(with AFP)

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