Will the effort to control public spending already be in place in 2017?
It is difficult to say what will be the rate of change in this area. We have inherited commitments for which no credit was planned for 2017, such as the Future Investment Program … We will also have a higher than expected increase in local government spending: this is due to the end of the electoral cycle, which pushes regions and departments to invest, but also the signal sent last year by the previous government when it decided to reduce the effort required to communities.
The commitment of our government is, in any case, the greatest transparency on the figures and to limit as much as possible load carryovers from one year to the next.
The European Commission is worried about “little room for maneuver” to bring the deficit back under 3% durably …
I hear the Commission’s two uncertainties for 2017. With regard to Areva’s recapitalization, we ourselves have included 2 billion euros in our deficit forecast. For the 3% tax, there is every reason to believe that accounting for two years ($ 5 billion refunds this year and $ 5 billion next year), which corresponds to the pace of filing of claims and the ability to processing and verification of claims, is relevant. On the merits, we considered that the least harm was to apply an exceptional tax on the profits of large groups. We could have decided to let the deficit slip or to increase French taxes. It is not our choice, I am sure the Commission will appreciate it.
Do you nevertheless understand his doubts?
I understand the reasons for his caution even if it hurts my patriot pride … It’s a bit like the story of the boy shouting at the wolf: by explaining that we were doing the reforms without reflecting the In reality, our credibility has begun. It will take several months for the Commission to see that things have really changed in France.
How to achieve it?
It was necessary to change the method immediately. That’s what we did and I think our approach is appreciated. We have “sincerized” the budget, without raising the taxes of our fellow citizens. I’m proud of it. Secondly, our first budget year reflects courageous structural reforms – on taxation, on housing or employment policy – which seemed to us to be essential, even if they are politically delicate. And this the Commission sees: I accompanied the President of the Republic in Guyana with the President of the Commission Jean-Claude Juncker, I felt confidence.
Given the improvement in tax revenues, do not you regret the coup de plan of 5 euros on the APL, this summer, which was much criticized, for a minor budget issue …
No. The reduction of public spending is like sport: at first it is hard, but once the movement is launched, it moves forward more easily and we see the positive effects. It is obvious that the emergency measures that we are obliged to take during the year are not the best. This is why today structural changes are taking place in housing policy. There is obviously good public spending, but you can see that this is not the case when we spend 40 billion euros for housing while having 4 million poorly housed!
In general, the idea is to reduce taxes for the French at the same time as we reduce public spending by making it more efficient. It is this logic that we will defend in the Public Action 2022 program.
The personalities at the head of the public action committee believe that the priority is to improve public services, not to reduce spending …
We must do things in order: first, where do we want to go, then what means to allocate. But it is not illogical to think that by modernizing organizations, transforming public action to improve public services and make it easier for agents to do their jobs, we will be able to make smart savings! For the first time, we have planned a budget line – 700 million – to finance the investments necessary for the transformation of the State. We have ambition. I expect the committee composed of qualified individuals from all walks of life to be free and make disruptive proposals. Their conclusions will complement the results of the consultation of users and agents within the framework of the Forum of Public Action. One thing is certain, as of budget 2019, we will draw the consequences to initiate the modernization of public services wanted by the President of the Republic.
Public spending will grow 0.5% more than inflation next year …
Given the “dynamics” of spending we have inherited, it is already a performance to have managed such a slowdown. We are achieving significant savings in the context of coherent housing reforms or the decline in subsidized jobs, in other words subsidized precarious jobs. In the public service, we will finance the entire PPCR – which is an extremely important effort of 10 billion euros over the five-year period – with a timetable designed to make it sustainable. On the other hand, no undifferentiated and general increase of the index point and the restoration of the day of deficiency.
The idea settled in part of the opinion that the 2018 budget was the “budget of the rich”. Should we have done otherwise?
Tax should only be touched with a trembling hand, if I paraphrase Montesquieu. But I note that our efforts to cut spending and our major tax reforms have been passed smoothly in the National Assembly. Confidence returns among business leaders. As for French people in general, I have the feeling that they are waiting to see the results of our action, particularly in terms of purchasing power. They can already see that the promises are kept and they will start to see the effects as of January 2018 because our budget is strongly redistributive.
The State will vouch for the loans of the Olympic Games Organizing Committee. Are not the costs going to skid?
The budget of the Olympic Games is 7 billion euros, including 1 billion budget appropriations. The Ministry of Public Accounts, like the Ministry of Sports, along with Inter-Ministerial Delegate Jean Castex, will pay close attention to ensuring that the budget is respected and that public money is used responsibly. The State will also guarantee the loans made by the organizing committee.
Your ministry has contributed a lot to the downsizing of the state. At the time of the “Paradise Papers”, is it advisable to further reduce the tax audit teams?
Paradise papers reveal an aggressive optimization system on a global scale. On this subject, it is at the European level that we must fight, for example to move to a qualified majority on these issues and define a common list of tax havens. That’s what we do with Bruno Le Maire. At the national level, tax audit teams will of course do their audit work for the French nationals and companies mentioned. We can also strengthen tax intelligence by encouraging tax, customs and Tracfin units to work even more closely together. We have a job to do to improve the exploitation of data – which will be more numerous with the introduction of the automatic exchange of banking information – and to better target tax audits. Finally, I will make proposals to the President of the Republic on the tax police.
Should new anti-fraud measures be introduced in the budget collective?
I am attached to the fact that there may be aggravations of penalties for those guilty of tax evasion, because it is an indefensible violation of the Republican pact. The group LREM, through the voice of its president, Richard Ferrand, has just tabled an amendment to automatically extinguish their civil rights tax evaders characterized for ten years. I already said that I was in favor.
Have you found an agreement with Google on its tax litigation?
We are still in discussion. My statements in July re-launched the negotiations with a whole slew of digital businesses undergoing a turnaround. We are ready for good agreements, which respect the interest of the state, so not under any conditions.
On the withholding tax, what conclusions do you draw from the various audits carried out?
The experiment, like the IGF report, reinforced the idea that a switch in January 2018 would have led to an industrial accident. These studies have two major contributions: they provided a new estimate of the cost to collectors that would be 300 to 400 million euros at launch, which qualifies a previous estimate of 1 billion; they confirm, after evaluation of the alternatives, that the collection by the employers remains the best device to guarantee a full contemporaneity, that is to say the perception of the tax in real time. So we decided implement the withholding tax on 1 January 2019, using an improved and simplified device for employers. These measures will be incorporated into the amending bill with, for example, a minimum fine for defaulting collectors divided by two from € 500 to € 250.