2026 Budget: Childcare tax benefit will not be changed, government assures

"There are two issues on which I believe that collectively, we see that it works and that we should not touch: everything that concerns childcare and everything that concerns support for the elderly," Ms. de Montchalin declared on RTL.

"I say this very solemnly: these two subjects are useful, they are effective. (...) There will be no change," she assured.

The minister indicated that 26 personal services professions currently benefit from a tax advantage corresponding to an income tax credit equal to 50% of the expenses incurred.

"Is this the right scope? Is it a good reimbursement rate? What is the right balance between undeclared work, which we don't want to encourage, and the proper use of public money?" she asked, citing classes or home sports, but without commenting on household expenses.

"But I repeat, anything that affects childcare, anything that affects support for the elderly, I do not want to see touched. Afterwards, parliamentarians can decide otherwise," she stressed.

Prime Minister François Bayrou is expected to announce his budget guidelines by July 14, with the aim of reducing the public deficit to 4.6% of gross domestic product (GDP) next year, after an expected 5.4% this year and 5.8% in 2024. The government is prioritizing spending cuts over tax increases.

"This is the last moment to be courageous," Amélie de Montchalin urged, "we must get our act together," recalling that France was the eurozone's worst performer in terms of public deficit. She raised the "risk" of being placed under supervision by international institutions such as the IMF.

"In all ministries, we can do better. In all ministries, we can ask ourselves questions about how to best use the money," including those of Justice, the Interior and Defense, which benefit from multi-year programming laws.

For these sovereign ministries, "the question for next year is: do we do everything that was planned? Do we do it differently? Do we do a little more? Do we do a little less?"

Ms. de Montchalin reiterated her desire to reduce the number of civil servants, citing as an example the 25% reduction in staff within the Directorate General of Public Finances (DGFiP) over the past ten years.

"We have had increases in recruitment in ministries where, as a result (...) we no longer have, and will no longer have, in the coming years, the means to increase civil servants' salaries," she warned.

We must "ask ourselves (if) each euro that the French pay in their taxes (is) useful for everyday life. If the ministers and we ourselves cannot answer this question, then that means that this euro is not useful, that means that we should not spend it."