With mixed economic prospects and a giant public debt, the 2024 state budget, presented on September 27 to the Council of Ministers, will have to make choices: no general tax cuts, the desire to green the economy, and attempts to preserve household purchasing power.
The government now forecasts growth of 1.4% in 2024, instead of 1.6%, “to take into account international uncertainties”, while the interest on the debt alone will jump from 9.5 billion euros to 48 .1 billion next year. To ensure that its public deficit trajectory remains within the targets imposed by Brussels, Bercy will put an end to the tax largesse distributed to businesses and households since 2017.
Thus, the government had promised the total abolition in 2024 of the CVAE, a production tax weighing on companies. This disappearance will now be spread over four years. Households will wait until 2025 to see a tax cut of 2 billion euros mentioned by Emmanuel Macron. The State will make savings of 16 billion, including 10 billion linked to the end of the tariff shield. But the number of civil servants will not decrease, with recruitment in the justice system and the police in particular.
For France to “become the first green economy by 2040 in Europe”, as the Minister of the Economy Bruno Le Maire hopes, the State will commit 10 billion euros to the ecological transition in the budget, of which 7 will be spent in 2024. The resources allocated to MaPrimeRénov’ for the ecological renovation of housing will increase by 1.6 billion euros. 500 million euros in tax credits will be distributed to companies that build wind turbines, heat pumps or photovoltaic panels. The “ecological bonus” for the purchase of electric cars will be maintained but will depend next year on their “environmental score”, in particular their transport distance, undoubtedly to the expense of Chinese vehicles.
The State will attack “brown niches”, tax advantages encouraging the use of fossil fuels, such as that on non-road diesel (NGR) used by agriculture and public works: it will gradually disappear from here in 2030 and the money saved will go entirely “to greening the economy”, according to Bercy. The government will tax highways and airports and could also attack the imposing margins of refining companies.
The State, which currently finances 37% of household electricity bills, will however maintain a price shield on this energy until the end of 2024. In addition, social benefits, pensions and the income tax scale will be indexed to inflation, a cost for the State estimated at 25 billion euros.
The government admits that it will have to use 49.3 to have the budget adopted in the National Assembly. The Minister of Public Accounts, Thomas Cazenave, however, regularly receives parliamentarians from all sides as part of the “Bercy Dialogues”, to try to identify points of consensus. In this context, the budget could thus include a tightening of taxation on furnished tourist accommodation such as Airbnb. The government will also support possible amendments on limiting companies’ buybacks of their own shares.
The Social Security budget, also soon to be presented, should provide for the doubling to one euro of the deductible on medicines and medical consultations, with an unchanged annual ceiling of 50 euros, and perhaps a brake on the compensation for sick leave. No additional tax, however, on tobacco and alcohol. For their part, the contribution of local authorities is expected on the ecological transition. They represent “70% of public investment” in this area, “nearly 15 billion euros that we are going to mobilize”, according to Thomas Cazenave.
