2023-06-19 14:06:00
The government continues to roll out its program of budget cuts. After sending the stability program to Brussels in April, the executive set the budgetary course for the next few years during the public finance meeting organized this Monday in Bercy. Accompanied by the Ministers of Economy Bruno Le Maire and the Minister of Public Accounts Gabriel Attal, Prime Minister Elisabeth Borne came to conclude this morning devoted to public spending .“We must assume that we have to save money when we find that devices do not achieve their results or not sufficiently”she said.
Pressed by the verdict of the rating agencies, the executive intends to show that it is pursuing a more restrictive budgetary policy. But behind this vast communication operation, the government’s room for maneuver is particularly narrow.
The head of government confirmed that she was counting on growth to restore public finances. But the latest INSEE GDP growth forecast for 2023 (+0.6%) reveals that the French economy has largely run out of steam over the quarters since the outbreak of the war in Ukraine. Admittedly, inflation makes it possible to reduce the debt-to-GDP ratio by improving tax revenues, but food prices still remain at a high level.
On the social front, the reforms of unemployment insurance and pensions allowing to make ample savings in recent months have left significant consequences in France. These new cuts might fuel the exasperation and mistrust of the French towards President Macron as they emerge from a particularly electric spring.
In France, economic growth will run out of steam to 0.6% in 2023 according to INSEE
Cuts in work stoppages, in taxation on housing…
In the viewfinder of the government, there are in particular work stoppages. The Minister of the Economy spoke of “drifts”. “In 2022, we had 8.8 million sick leaves in France, compared to 6.4 million ten years earlier. It is an increase of more than 30%, which led us in 2022 to spend a total of 16 billion euros”, recalled the tenant of Bercy.
The government thus intends to tighten the screw on these expenses by summoning the social partners, the medical advisers, the National Health Insurance Fund with a view to preparing the next social security budget for 2024 (PLFSS). Bruno Le Maire did not, however, mention the still very poor health context in 2022. However, numerous surveys since 2020 have documented the deterioration in the health of workers in sectors particularly exposed to the risk of infection. Bercy also mentioned avenues for savings in drug expenditure. Unsurprisingly, the government finally recalled the end of the Pinel device and the reform of the zero-rate loan “where it is most needed”. Bercy has quantified the savings made on these last two devices at 2 billion euros.
Learning and the CPF in the sights of the executive
Among the other avenues mentioned are employment aid. At the time of the pandemic, the executive had put in place very significant aid to subsidize the hiring of apprentices in private sector companies. In a recent study very detailed, the economist of the OFCE and specialist in labor issues a Bruno Coquet drew up a severe assessment on the budgetary level of this policy of learning since the health crisis.
The researcher describes its budgetary cost as “nebulous”. These massive hiring aids have been accompanied by an explosion in the number of apprentice training centers (CFA, multiplied by 4), going from 954 centers in 2018 to 3,102 in 2023. Faced with this surge, Bruno Le Maire has estimated that he was “possible to reduce the price of training paid by the State for apprentices, to compensate for certain abuses on the margins”. He also mentioned ways to save money on the personal training account (CPF).
Personal training account: a mixed record
State operators under surveillance
State operators will also have to tighten their belts. Bercy intends to force them to “a return to the rules of good budgetary management”. It is “limit their cash flow and engage in a contractualization process”, said Bruno Le Maire. The Minister of the Economy also opened the thorny question of affected taxes. The resources of an operator “must correspond to its needs and cannot constitute annuities at the expense of taxpayers”, continued the Minister of Finance. On the other hand, he did not mention any operator in particular during his intervention.
Removal of fuel tax loopholes
Finally, tax benefits on fuel in certain professional sectors might be abolished. The tax administration might thus put an end to the niches on non-road non-agricultural diesel and non-road agricultural diesel. “It is necessary to align our actions with our climate commitments”, justified the Minister of the Economy.
On these explosive subjects, the executive promised an implementation « progressive d’ici 2030 ». Already, during Macron’s first five-year term, the government had already promised to review these tax expenditures. But he had come up once morest the revolt of the construction and public works sectors. Faced with fears, Bruno Le Maire promised “compensatory measures”.
A principle of self-insurance for communities
The other novelty announced by the government is the option of self-insurance for communities. “It is a question of using the budgetary surpluses of the communities so that they can constitute financial reserves in the event of hard blows”, indicated Bruno Le Maire. The minister also suggested setting up “of a high council of local public finances”.“It will regularly bring together, around the Minister of Finance, all local spending players at all levels to define strategic choices”, added the number two of the government. Given the stormy state of relations between the associations of elected officials and the government, these announcements might be a flop.
Indeed, several organizations, including the powerful association of mayors of France (AMF), shunned the big rout of the executive at Bercy on Monday. “The last-minute proposal to create a high local finance council under the aegis of the Ministry of Finance is at best a provocation, at worst a disregard for the Local Finance Committee, an institution democratically elected by the whole community” reacted at the end of last week the AMF in a press release. The promise of a “new method” does not seem to convince local elected officials.
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