taxes, pensions, electricity… 8 questions to understand everything about the planned savings

Prime Minister Michel Barnier presented to the Council of Ministers, Thursday October 10, his finance bill for the year (PLF) for the year 2025. The executive’s primary objective is to “reduce our deficit”explained Antoine Armand, the Minister of the Economy and Finance, during the press conference following the Council of Ministers. He mentioned the objective of a deficit of 5% for 2025.

To achieve this, we need to find “60 billion euros”. The PLF therefore provides for job cuts, particularly in education, but also at France Travail, as well as tax increases: 2 billion more for very high incomes.

Barely announced, this budget caused a lot of reaction from the oppositions. “This budget is a calamity,” lamented Jean-Luc Mélenchon on X (Twitter). The socialist deputy Philippe Brun, vice-president of the finance committee, denounced an “austerity plan with clear cuts in the most important budgets of our public services”. For his part, the Prime Minister “recalled” his “desire to be responsible rather than popular”. “I want this effort to be fair and balanced,” he also indicated.

To better understand the implications of this Budget and the future savings in all sectors – which must still be validated in Parliament during a vote which promises to be perilous without a majority for the government – RTL answers the questions asked by listeners.

1. Why cut 4,000 teaching positions?

As the number of students is falling, the government has estimated that 4,800 fewer positions are needed to remain balanced. They therefore imply that by eliminating 4,000 positions in this budget, that’s still 800 more positions than this year. “We do not have to systematically increase the number of teachers while the number of students facing them will decrease,” Budget Minister Laurent Saint-Martin reacted on RTL.

This arbitration, however, promises to be debated. As we often hear in our reports since the start of the school year, the needs in national education are still enormous. So the signal seems rather bad. The finance bill also provides for the elimination of positions at France Travail, 1,000 jobs are affected.

2. Will aid for small and medium-sized businesses decrease?

The 2025 finance bill also provides for a reduction in aid to businesses, starting with reductions in charges, a system to encourage companies to hire. Above all, the government believes that this encourages companies not to increase low wages. The system is revised to save five billion. Aid for hiring work-study students will also be cut.

3. Who will be affected by transport taxes?

The train will be spared, but a surcharge on plane tickets is currently being studied. It already exists, around 2.50 euros per ticket compared to 15 euros in Great Britain for example. The government therefore judges that it is insufficient and is targeting an additional 1.5 billion, i.e. a three-fold increase in this tax on plane tickets.

4. Are we recovering as much money in the pockets of the wealthiest as in those of low-income retirees?

The finance bill provides for recover 1.5 billion euros from the wealthiest compared to 3.6 billion from retirees. The richest will be taxed a little more in 2025, but it is not a surcharge, rather an anti-optimization device. For example, a couple who earns 500,000 euros per year will not be able, via legal measures, to lower their taxes beyond a certain threshold.

5. Who wins and who loses on electricity prices?

Everyone is a loser, but that does not mean that the bill will necessarily increase. The government, at the time of the energy crisis, froze a tax on electricity to prevent our bills from exploding. This budget provides for a reinstatement of this tax, and even an increase, but since then, electricity prices on the markets have fallen again.

Today this means that 8 out of 10 French people, those with regulated prices from major suppliers, will see their bill drop by 8% in Februarybut without the reinstatement of these taxes, the reduction would have been much greater.

“In February, we will see what the real prices of energy are, particularly electricity, and we will estimate when and to what level we will increase the tax,” the Budget Minister said on RTL.

6. Is the increase in pensions on July 1 guaranteed?

Guest on RTL, Friday October 11, the Budget Minister assured that the revaluation which was to take place in January and then postponed to July would no longer be postponed. “In an effort to participate in public finances, we estimate that we can make a difference of six months“, he explained. “For retirees, indexation will take place, an additional 6 billion will be given in 2025,” he continues.

7. Will there be a reduction in Social Security reimbursement?

During a medical consultation, health insurance covers 70% of the cost of the consultationthe rest is left to the patient and then reimbursed by their mutual insurance company. To reduce the Social Security deficit, the government is considering increase this support to 60%.

“We need mutual societies to take a greater part in reimbursement, but this debate must take place in Parliament,” the Budget Minister explained on RTL.

8. What efforts is the State making to reduce its expenditure?

The decline in state spending is much more nebulous. On the budget saving lines, the State considers that it is making half the effort, 21 of the 41 billion. Except that it’s hard to see clearly. The first line indicates a moderation of spending of 15 billion euros, these are the famous framing letters decided by the former government, that of Gabriel Attal. This will translate concretely into frozen credits and deferred investments.

He also has the elimination of 2,200 full-time positions out of 5,700,000 civil servants. This is the smallest saving in the document, 100 million euros. “Another optimization effort” to the tune of 6 billion euros without details and finally, “measure of moderation and additional savings on State expenditure (by amendment)”, 5 billion euros. Due to lack of timethese famous moderation measures will be decided in the National Assembly.

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