Illustrative image of the Court of Auditors in Paris. – BERTRAND GUAY / AFP
The Court of Auditors released its findings on Tuesday. It front of
major tax cuts still decided this year, the wise men of Cambon Street call on the government to
clean up the state’s finances, the situation of which remains “worrying”.
“The recovery of public finances, already very gradual in recent years, is now almost at a standstill”, and the government’s ambition in this area is “limited”, judges the financial institution responsible for evaluating public policy management, in its annual report released Tuesday. France therefore has “less room for maneuver for the policy it intends to pursue, especially in the event of a recession or other major shock”, she warns, at a time when the health crisis of the new coronavirus is feared
a global economic downturn.
10 billion more reductions
After the measures in favor of purchasing power taken at the end of 2018 and last year in response to the movement of “yellow vests”, the government has still decided for more than 10 billion euros in reduction of levies this year, including five billion in income tax relief, 3.7 billion via the new phase of abolition of the housing tax or 2.7 billion in corporate tax cuts.
“The choice was made to further increase the tax reduction measures, by only partially pledging these measures through savings measures,” note the authors of the report. The government has planned for 2020 to reduce the public deficit to 2.2% of GDP, from 3.1% last year, “its lowest level since 2001”, insists Bercy in his response letter sent to the Court. But the decline reflects “essentially the technical backlash from the transformation of the CICE” (Tax Credit for Competitiveness and Employment), and not from additional efforts to control spending, tackles the institution.
Pinned public slaughterhouses
She mentioned in particular the abandonment of the objective of downsizing in the public service and an “optimistic” forecast on the savings made by the unemployment insurance reform. She therefore calls on the executive to plan “an ambitious structural deficit reduction (…) and not delaying (…) the bulk of the efforts to be made”. And therefore awaits firmly the revision, planned for the spring, of the public finance programming law, setting the trajectory over several years.
In its report of more than 860 pages, composed this year of 22 chapters, the institution, which is still awaiting the appointment of Didier Migaud’s successor as first president, also looked into several areas where improvements could be made in order to better manage public money. The wise men point out in particular the “degraded” management of public slaughterhouses for slaughter animals by local authorities and propose their takeover by cooperatives bringing together all the actors concerned.
Difficulties facing digital
They also deplore the “complexity” of the calculation of housing aid (APL), a source of injustice and fraud, while welcoming the reform which will, from April, allow the calculation of aid from the beneficiary’s current income and not those registered two years earlier. The Court is also concerned about the “worrying” financial situation of the Ecole Polytechnique, in chronic deficit between 2014 and 2018, and whose strategic choices “are not likely to project it into the future with serenity”.
On the other hand, in the midst of a pension reform, it delivers satisfaction with the management of supplementary pensions for private Agirc-Arrco employees by the social partners who have succeeded since 2015 in “restoring their solvency”. New for 2020, the Court also devoted several inquiries to its report to a common theme: the use of digital technology for public action. She believes that all the conditions are “not always there” for successful integration and delivers her recommendations.
Pôle Emploi is notably the subject of criticism: if the organization has greatly developed its digital services, with for example dematerialized registration, it has neglected the “early detection of people in difficulty with digital technology”, deplores the Court of accounts that recommend him to remedy it.
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