Key points at-a-glance for the 2017 budget: the French Government is on target

The Government has presented the major balances of the 2017 budget  the last budget of the five-year period.

Its three overarching priorities for the past five years will remain unchanged in 2017: fiscal consolidation, boosting growth and job creation and strengthening social justice.

Fiscal consolidation: whereas the deficit gap grew by 2 percentage points of GDP between 2007 and 2012, it will have narrowed by 2 percentage points of GDP between 2012 and 2017. At the same time, public expenditure will have fallen by nearly 1 percentage point of GDP over five years, and compulsory levies by 0.3 percentage points in three years.

Boosting growth and job creation: by 2017, the slate will have been wiped clean regarding all of the corporate tax and contribution hikes introduced since 2011, a momentum which the Government fully intends to keep going well into 2018 and beyond by bolstering the competitiveness and employment tax credit (CICE) and cutting the corporate tax rate. Corporations' profit margins (which the crisis dragged down by 3 points) have almost bounced back to their historic high already  and even surpassed it as far as industry is concerned. The signs of renewed investment since 2014 have been unmistakeable, and this will continue in 2017 with an increase of 3.5% (after 3.8% in 2016). The economy has new jobs to show for itself once again in the market sector, with more than 120,000 jobs created in the space of one year. 159,000 new jobs are forecast in 2017.

Social justice: throughout the five-year period, the Government has gone to great lengths to improve the living conditions of low- and middle-income households through tax and social measures. The standard of living of the poorest 10% has risen by almost 5%, while the richest 10% have seen their taxes increase by 1.7%. On the subject of income tax, overall, despite the raft of measures taken since 2012, revenue on income tax has not increased  in fact, it has fallen. The series of reforms on income tax bands since 2014, concentrated between the 4th and 8th income deciles, have reduced the tax burden on the middle classes. Efforts will continue in this direction in 2017, particularly with the transformation into a tax credit of the tax advantage for individuals using personal and household services  for over 1.3 million people in addition.

The finance bill for 2017 is due to be presented in detail on 28 September. Its key points at-a-glance are as follows:

The Government is on course to meet its target if 1.5% economic growth is reached in 2017  in line with the OECD's or Banque de France's forecasts  just as it did in 2016. These hypotheses are entirely plausible and "unchanged since the spring of 2014", Michel Sapin, Minister of the Economy and Finance, recalled.
5 billion euros' worth of additional recovery measures will be necessary in 2017, as indicated by the Government last spring.

At the same time, the Government's priorities are being financed

- 5.7 billion euros will be mobilised for the benefit of youth and education, the security of  citizens and measures supporting employment.

- a fourth income tax cut in a row will be incorporated in the finance law for a total of 1 billion euros, for the benefit of five million households. Since 2014, income tax will have been cut by a total 6 billion euros.

- concerning health, the target annual national health insurance budget (Ondam) has been raised to 2.1%, which amounts to an extra 700 million euros, particularly following the new medical convention negotiated with GPs and the increase in the index point of the hospital branch of the civil service.

The efforts asked of local authorities through the drop in appropriations have been alleviated by 1.2 billion euros, in line with the President of the Republic's announcements back in June.

The corporate tax cuts will be more targeted with even lower social contributions for independent businesses and an initial cut in the corporate tax base rate, which will be brought down to 28% for SMEs in 2017, before applying more widely between then and 2020.

All of these new measures announced in no way jeopardise the path of our balance, as they are all being financed in full.