Budget 2023: Bercy postpones the more painful measures

In presenting the arbitrations retained by the government, the Minister Delegate in charge of Public Accounts, Gabriel Attal, spoke of the Finance Bill (PLF) 2023 as the one opening “a phase of budgetary normalization”. In view of the budget documents sent to Parliament on Monday, this normalization will take place in measured steps: State expenditure should thus increase next year by nearly 15 billion in total compared to what was planned for this year, while the sources of savings remain mysterious for the moment.

The “reprint” published on Monday is the document setting the ceiling for the evolution of credits for each mission assumed by the State. What give a good trend of the intentions of the executive for the PLF which must be debated in Parliament from October.

Additional credits

As early as July, Bercy had warned – in the stability program sent to Brussels – that we should not expect a decline in the public deficit next year: this is expected at 5% of GDP, i.e. the same level than that expected for 2022. For the State and its agencies – one of the components of public administration, with Social Security and local authorities -, it is even a slight deterioration in the accounts which is anticipated, to -5.6 % of GDP against -5.5% this year. The real recovery for the central government balance (with a reflux still limited to -5%) is not actually expected before 2025.

Logically, the table present in the budget document sent to Parliament displays a long list of additional credits for the State. Certainly, Bercy can boast of displaying the ambition of a decline in volume (excluding inflation) of public spending next year by -1.8% compared to the amending budget which has just been voted last week. , with even a drop of -5.2% for the central administration. But these figures can be explained in particular because part of the aid to counter the effects of price increases is supposed to fade away.

On the other hand, if we compare the 2023 appropriations ministry by ministry compared to what the 2022 budget provided, then the “plus” column is well filled. An evolution assumed by Gabriel Attal, who judges that this should in particular make it possible to finance the “three priority ‘blocks’ corresponding to the three essential ‘drivers’ of the five-year term: training and employment, the sovereign pole and the ecological transition ” .

In fact, the Ministry of Ecology is endowed with an additional 1.9 billion (+7.6%) and Agriculture with 500 million (+15.6%). For the sovereign, Defense is entitled to the additional 3 billion that its programming law provided for – while the military feared cuts – and the Security mission will commit an additional 1.4 billion (+ 9.5%).

France 2030 planed

Even more spectacularly, the Labor budget jumped by 6.7 billion and now represents the third item of State expenditure. The 2023 financial year is also proving to be generous for National Education (+3.6 billion, i.e. +6.3%) while the programming law for research produces some effects (1.5 billion, i.e. an increase of 5 .1%). Finally, official development assistance also received a substantial boost (800 million, or +13.8%).

And the savings in all this? At this stage, it is still difficult to identify them. The gradual exit from the recovery plan will allow a lower expenditure of 8.6 billion next year. In addition, the France 2030 plan – yet announced with great fanfare last fall – will also be less well endowed in 2023, with 900 million less credits. A few weeks ago, the brand new Secretary General for Investment, Bruno Bonnell, displayed his fears of a planing stroke in relation to the 54 billion promised by 2030, judging that “this commitment, we will have to justify in light of the context”.

Finally, the State will freeze the level of its allocations to local authorities (at 41.1 billion), which amounts to saving money given the inflation that is pushing spending upwards.

The hunt for tax loopholes

For the rest, appointment is given at the start of the school year. At the beginning of July, the Minister of the Economy, Bruno Le Maire, announced that he wanted to involve parliamentarians in this search for savings with the creation of a “task force to thoroughly rethink public spending”, whose management has been entrusted to Renaissance MP Daniel Labaronne. In addition to the pension and unemployment insurance reforms, carried out by the executive and whose budgetary effects will be progressive, avenues should be explored with elected officials on housing, employment aid or even the elimination of niches taxes, especially climate-unfriendly ones.

Bruno Le Maire had already tackled tax loopholes, the last attempt in 2019 having proved to be poor in results. “Experience shows the difficulty of implementing their abolition”, had also noted a few days ago the High Council of Public Finances, in the very critical opinion delivered on the budget forecasts of the executive.

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