targeted tax increases, postponement of the increase in pensions, reduction in spending… How the government plans to find 60 billion euros

The government’s budgetary roadmap is taking shape. In his general policy declaration to the Assembly, Tuesday October 1, Michel Barnier announced his intention to reduce the public deficit to 5% in 2025 and to 3% by 2029, after an expected slippage to 6.1% This year. To achieve this, the government plans to find 60 billion euros from next year.

Approximately “two thirds” of this budgetary effort, or 40 billion, will come from a reduction in public spending, assured the Prime Minister. He intends to find an additional 20 billion on the revenue side, in particular from targeted taxes and “exceptional”. Before the presentation of the finance bill to the Council of Ministers, scheduled for October 10, franceinfo summarizes what we know about the government’s first steps.

“Temporary” tax increases for the wealthiest and certain large businesses

To straighten out the public accounts, the Prime Minister announced “participation in collective recovery for large companies which make significant profits” and also intends to put in place “an exceptional contribution” of the “The most fortunate French people”. The Minister of the Economy has, however, already warned that this “effort” will only be “temporary” And “exceptional”. “There is no way this will last several years in a row at the same level for everyone,” insisted Antoine Armand, the Minister of the Economy, Wednesday October 2 on RTL.

The tax increases will only affect “those who have extremely high incomes”he added. On the business side, “VSEs, SMEs, mid-sized companies and a certain number of groups which are very exposed at the moment must not contribute more”. “The idea is to make the very large groups in the country which have made profits contribute, including in difficult situations”said the tenant of Bercy.

On the other hand, the Minister of the Economy assures that he “will not generally affect the tax scale for those who work on a daily basis” and it will not increase “taxation of the middle classes and upper middle classes”. For the moment, the government does not precisely quantify the revenue expected from these tax increases and refers for details to the presentation of the finance bill (PLF) next week.

Some 20 billion savings requested from ministries

The greatest effort to reduce spending will be required of the State. The ceiling letters sent at the end of August by the previous government already provided for a reduction of 15 billion euros in ministerial spending in 2025. The new government team intends to ask them for an additional five billion euros. However, due to the tight deadlines for preparing the budget, this additional effort could not be integrated in time into the finance bill sent to the High Council of Public Finances and will be defended by the government in Parliament via amendments.

The government believes that all public administrations must be involved. A little more than a billion euros in spending cuts will be required from state operators. “A smoothing” And “a moderation” of local government spending is also expected. Before the Finance Committee of the Assembly, at the end of September, the Minister of the Budget, Laurent Saint-Martin, expressed alarm at community spending “higher than the trajectory predicted”, evoking an additional “of the order of 16 billion euros for 2024”. In a report published Wednesday, the Court of Auditors suggests a gradual elimination of 100,000 employees in communities to generate “4.1 billion euros per year from 2030″.