Budget 2025: how the Senate wants to reshape the government project

Budget 2025: how the Senate wants to reshape the government project

2024-11-13 18:07:00

After being mishandled in the National Assembly, the government’s finance bill (PLF) should experience a gentler fate in the Senate. But he will not come out unscathed.

After the rejection at the Palais-Bourbon of the revenue section, it is now up to the senators to look at the initial text of the PLF, which they must officially take up on November 20. The government wants to rely on the senatorial majority, from the right and the center, so that the voted budget best reflects its intentions, before the text is discussed again with the deputies in a joint joint committee, then probably makes the subject of a 49.3.

“A lot of things will be done with the senators, particularly on local authorities,” adds a government source, while the executive must propose its own amendments to the text. The first welcome of the PLF at the Palais du Luxembourg, through the voice of the general rapporteur of the finance committee, Jean-François Husson (LR), was enough to reassure Matignon and Bercy. “I of course support the draft budget that the government is proposing to us and in particular the objective of reaching a 5% deficit next year,” he declared at a press conference.

Less increase in electricity

But this endorsement is accompanied by substantial adjustments, on four “areas of improvement”, according to the rapporteur, who warned the government of its initiatives. The most important concerns the electricity tax. While Bercy wanted to generate more than 3 billion euros in additional revenue by raising the excise beyond its pre-crisis level, the Senate Finance Committee voted this Wednesday for an amendment which deletes this article.

“It’s not going to make the government jump for joy,” admitted Jean-François Husson. To partly compensate for this shortfall, another amendment, also voted on Wednesday, plans to increase the excise duty on natural gas for fuel use by 4 euros per MWh. A flammable path, but which would generate 900 to 950 million euros in revenue, according to the rapporteur.

Senator Husson also proposes reducing the effort requested from local authorities, which reaches 5 billion euros in the government project. He is particularly opposed to the reduction in the rate and the limitation of the base of the compensation fund for the value added tax (FCTVA), provided for by the government in the PLF and removed by an amendment voted in the committee of finances this Wednesday. The government hoped to get 800 million euros from it.

Fight against fraud

The question of the reserve fund of 3 billion euros, which appears in the second part of the PLF not yet examined by the finance committee, is also raised. “With a certain number of stakeholders and the government, we are working on proposals,” he said. The Congress of Mayors next week as well as that of the departments this week, which Prime Minister Michel Barnier is due to attend, could be an opportunity to make a gesture towards communities. The possibilities of an increase in the ceiling of transfer taxes (notary fees) and targeted increases in the mobility payment are notably mentioned.

In parallel with these developments, the general rapporteur proposes to increase revenues, via various anti-fraud and anti-abuse measures, such as the regulation of the research tax credit (400 million), or the fight against “CumCum” fraud. to dividend arbitrage, for which it will present a mechanism in a future amendment.

Spending cuts

The Senate Finance Committee is also tackling spending. It thus approved a cut of 200 million euros on state medical aid, voted to eliminate credits for the universal national service (SNU) or even adopted an amendment to reduce the budget of the teacher training. A saving which could prove illusory, these credits having already been consumed elsewhere, according to our sources. Learning aids are also in the sights, for savings of more than 750 million euros in total.

Two amendments voted on this Wednesday in the Finance Committee finally provide for drains on the treasuries of State operators (650 million euros for the CNC, instead of 450 million euros planned, and 221 million euros for the Caisse des Dépôts et Consignations). “Measures with no effect on the public deficit,” points out a good expert in public finances, the situation of these operators already being taken into account in the calculation.

Overall, the proposals of the Senate Finance Committee would result in more than 4 billion euros in additional savings, indicates the rapporteur, which would make it possible to avoid deteriorating the balance planned by the government. Jean-François Husson also suggested the idea of ​​mobilizing the savings of the French by launching a “large mobilizing public loan”, to support the recovery effort.

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**Interview with Senator Jean-François Husson on the Finance Bill’s Journey through the ‌Senate**

**Editor:** Thank you for joining us today, Senator Husson. The government’s finance bill has faced some hurdles in the National Assembly.⁢ What can you tell us about the ‌Senate’s approach to the bill set for discussion on November 20?

**Senator Husson:** Thank you‌ for having me.⁤ Indeed, the finance bill, or PLF, experienced significant challenges in the National Assembly, particularly concerning the revenue⁢ section. However, we⁤ in the Senate are committed to reviewing the initial text with a cooperative spirit, especially given the senatorial majority we hold.

**Editor:** There have been indications that the government aims to rely on the Senate’s support to align the ‍budget with its intentions. What adjustments‍ are you considering as part⁢ of this collaboration?

**Senator⁤ Husson:** We ‌have identified several areas that will require improvements. Key among these is the electricity tax—initially slated to ⁣bring in over 3 billion euros in additional revenue. However,⁢ we’ve opted to ⁢remove that article to alleviate pressure on consumers. Instead, we are proposing to raise the excise duty on natural gas, which could ⁣generate about 900 to 950 million euros.

**Editor:** That sounds like ⁣a significant shift. What other ‍concerns do you have regarding local authority financing, especially given the government’s proposed reductions?

**Senator Husson:** My primary ‌concern⁢ is the 5 billion ⁣euros reduction ⁢requested from local authorities. The proposed changes to the compensation fund for value-added tax (FCTVA) are⁤ particularly troubling as they⁢ could exacerbate financial strains on local governments. We have unanimously voted to revoke those ⁣adjustments in the finance committee.

**Editor:** The topic of the reserve fund of 3 billion euros is also emerging. Can you‌ share any⁣ insights on how this ⁣might be addressed in ⁢the upcoming discussions?

**Senator ⁣Husson:** Certainly. The reserve fund is pivotal, and we are in discussions with various stakeholders to generate constructive proposals. Events​ like the upcoming Congress of Mayors, which‌ Prime Minister Barnier will attend, are ideal platforms to explore solutions ‍that can support our communities effectively.

**Editor:** As the Senate takes⁤ this more cautious approach, do you anticipate the government will adopt a more flexible stance during​ this process?

**Senator Husson:** Yes, I believe the government must be open to adjustments; the financial landscape is delicate, ⁤especially in light of ​recent economic challenges. Our objective‍ is to balance fiscal responsibility while ensuring that necessary services and support for local authorities remain intact.

**Editor:**⁤ Thank you for⁢ sharing your insights, Senator Husson.‌ We look forward to‍ following the developments as the Senate⁢ prepares to address the finance bill.

**Senator Husson:** Thank you for the opportunity. I look forward to keeping the public informed as we work towards a budget that meets our collective needs.

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