French Budget austere

Press, 3 September 1982, Page 6

French Budget austere

NZPA Paris France's Socialist Government yesterday announced an austerity Budget for 1983, reinforcing its drive to curb inflation and marking a contrast with the expansionist policies of its first year in office. Outlining the Budget bill after its approval by the Cabinet, a „ Presidential spokesman, Jacques Attali, said State spending was set to increase 11.8 per cent to 881 billion francs (?U5125.8 billion) next' year. This compard with a 28 per cent increase in the 1982 Budget, drafted to implement the Socialist Government’s initial strategy of

boosting public spending to generate economic revival. The government reversed its policy in June when it devalued the franc, introduced a wages and price freeze, and called for national austerity to bring down inflation. Mr Attali said the 1983 deficit had been set at 117.8 billion francs (SUSI6.B billion), 24 per cent up. on last year’s target and within the ceiling of 3 per cent of gross domestic product set by President Francois Mitterrand earlier this year. The 1983 finance bill, to be put to Parliament later this month, was a big effort to control the rise in public spending, Mr Attali said.

The tax burden would remain stable in real terms next year, the thresholds of all income tax brackets rising to take account of inflation. The Budget also includes an extension of a special, “solidarity” tax imposed on higher incomes last year, the creation of a new super-tax bracket of 65 per cent of income, and a rise in the threshold of a wealth tax created by the Socialists. The Budget Minister, Mr Laurent Fabius, said that the 1983 projections were based on an assumption that French G.D.P. would grow 2 per cent in real terms next year. It also assumed inflation of 8 per cent, he said.