#869 - National Budget System

This is also the reason why Prussia was the first to withdraw from the war—if they continued to fight, the country would go bankrupt.

In fact, Prussia has been able to hold on until now entirely due to funding provided by Britain.

Seeing the Crown Prince turn the page, Brienne immediately said:

“Your Highness, the total expenditure for the first ten months of this year is 650 million francs, and the estimated expenditure for the whole year is 800 million francs. That is to say, there will be a deficit of 30 million francs.”

Under Joseph's administration, France had achieved a fiscal surplus for two consecutive years, with last year's surplus reaching as high as 100 million francs.

This year, due to the huge consumption of the war, the situation of expenditure exceeding income has reappeared.

Joseph looked at the total amount of national debt at the bottom of the report, 1.87 billion francs.

He smiled nonchalantly and said to Brienne: “Our domestic production has not been severely disrupted, and the Iberian-Apennine Common Market can bring greater sales to factories. I believe that our income and expenditure situation will soon be reversed after the war ends.”

What he didn't say was that France would most likely win this war, and would receive huge war reparations at that time. Coupled with various war dividends, fiscal revenue would definitely increase substantially.

He had estimated in Southern Netherlands that the war reparations that the Netherlands paid to the Flemish Republic, after being transferred to France through various channels, would be able to reduce France's national debt by nearly 200 million francs!

Moreover, this money would not have the common problems of war reparations—the defeated country paying a small portion and then refusing to pay.

Of France's national debt, about 400 million is borrowed from the Dutch Bank, and previously, Flanders stipulated in the armistice agreement that war reparations would be secured by the debts of countries such as Britain and France.

That is to say, if the Netherlands wants to default, it can directly deduct France's debt.

Later, Austria can also provide a large amount of war reparations—Austria is not a poor country like Prussia, and the vast empire can be squeezed for a lot of profit.

Even if the war reparations are not fully paid, it can still help France reduce its debt by at least 100 to 200 million.

At that time, France's total debt will be able to be compressed to below 1.5 billion.

It should be known that this is only the direct benefit brought by the war. As the victor, there will be a large amount of hidden income.

France will be able to completely disregard the issue of debt in a few years.

After Joseph understood the income and expenditure situation for the first ten months, he picked up the 《French Fiscal Expenditure Estimate Report for 1794》 compiled by the fiscal system.

He didn't have much expectation for this report, after all, no country in this era would formulate a fiscal budget.

So he asked Brienne to gather people from the major departments of finance, industry, and agriculture to jointly form a budget committee. They would start by estimating the country's expenditure for the next year, and then gradually improve to formulating a budget after accumulating enough talent and experience.

The national fiscal management of this era is still in a very প্রাথমিক stage. Basically, wherever there is a hole, it is filled. If there is no money in the national treasury, they desperately tighten their belts and do nothing.

Britain did not begin to establish a fiscal budget system until 40 years later. Other countries were even later.

From the perspective of national fiscal management, formulating a budget is very important.

First of all, it can limit unnecessary waste. The budget amount is limited in advance, and no extra funds will be allocated to you if you want to waste it.

Secondly, it is to urge various departments to improve the efficiency of fund use. The head of the department who exceeds the budget will definitely be punished, and those who save the budget will be rewarded.

Don't underestimate the subjective initiative of officials at all levels. If each place saves a little, it is not surprising that tens of millions of francs can be squeezed out of the country in a year.

Most importantly, it is to strengthen the government's overall management of fiscal resources, using limited finances in the places where they are most needed.

For example, in this era, the fiscal budget must be biased towards the development of steam engines, as well as industries related to steam power, coal, and steel, thereby driving the entire country to accelerate in this direction.

In fact, the reason why France was able to surpass Britain in steam engines before was that Joseph used his power to implement a partial national-driven model, using the power of the entire France to compete with Watt's company.

If they still can't beat them, then France should stop talking about hegemony in Europe.

After the implementation of the national-level fiscal budget model, this situation of concentrating the power of the whole country to break through certain important fields will become the norm, allowing France to obtain greater progress than other powerful countries with the same amount of investment.

Brienne said from the side: “Your Highness, according to the budget committee's estimate, the total fiscal expenditure for next year should be around 850 million francs.”

Joseph nodded, this number was roughly reliable, so he opened the 《Expenditure Estimate Report》, but when he saw the total expenditure items, he immediately frowned.

Recurring expenditure items—that is, official salaries, road and bridge maintenance, national debt interest, etc.—accounted for 50%.

Government investment expenditure—that is, building water conservancy projects, paving roads, etc.—accounted for 4.5%.

Industrial and technological development expenditure—mainly the industrial development fund, as well as national-level technology research and development, etc.—accounted for 8%.

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Government service expenditure—that is, education, relief, etc.—accounted for 1.5%.

… …

Joseph immediately flipped back to check the details of the industrial and technological development expenditure that he was most concerned about, and saw that the total investment of the industrial development fund for the whole year was less than 35 million francs.

The projects involved are mainly concentrated in five important fields such as steam engines, automatic textiles, and chemical industry, and there is no expenditure in any emerging fields.

He immediately raised his hand to interrupt Brienne, who was still talking non-stop, and looked at the Minister of Industry:

“Count Mirabeau, I remember I should have mentioned to you that we should vigorously invest in the inland waterway transportation industry and the postal communication industry next year, but the industrial development fund has no plans in this regard?”

He roughly calculated that 36% of the total expenditure of 850 million is more than 300 million francs!

He frowned and shook his head and said: “Military expenditure should not need so much, right?”

It should be known that this year, after fighting a half-year-long total war, military expenditure was only about 140 million. Does Brienne think that we will have to fight a full year of national war next year?