Chapter 956: Chapter 864 National Budget System
This is also the reason why Prussia was the first to exit the war—if it continued, the nation would go bankrupt.
In fact, Prussia managed to hold on until now entirely due to the financial support provided by England.
Brian saw the Crown Prince turning the pages and imdiately said:
“Your Highness, the total expenditure for the first ten months this year is 650 million francs, with an estimated annual spending of 800 million francs. In other words, there will be a deficit of 30 million francs.”
Since Joseph ca to power, France has had a fiscal surplus for two consecutive years, with a surplus as high as 100 million francs last year.
This year, under the enormous consumption of war, the situation of spending exceeding inco has re-erged.
Joseph looked at the total national debt at the bottom of the report, 1.87 billion francs.
He smiled nonchalantly and said to Brian, “Our dostic production hasn’t been seriously disrupted, and the Iberian-Apennine Common Market can bring greater sales to factories. I believe our financial situation will quickly be reversed after the war ends.”
What he didn’t say was that France would likely win this war, at which point it would receive high war reparations, along with various war dividends, significantly increasing fiscal revenue.
When he was in the Southern Netherlands, he had estimated that just from the war reparations Holland gave to the Flemish Republic, which would be transferred to France through various channels, France’s national debt could be reduced by nearly 200 million francs!
Moreover, this money would not encounter the common issue of war reparations—where the defeated nation pays a small part and then starts to refuse paynt.
Of France’s national debt, about 400 million is borrowed from the Dutch Bank, and previously, in the ceasefire agreent, it was stipulated that war reparations would be secured against debts from countries like England and France.
That is to say, if Holland wants to renege, it can directly offset France’s debt.
Austria could also provide a large sum of war reparations—Austria is not as impoverished as Prussia, being a vast empire that can squeeze out quite a bit of revenue.
Even if not all war reparations are paid, it could at least help France reduce another one or two hundred million in debt.
At that ti, France’s total debt could be compressed to below 1.5 billion.
It’s important to know that this is just the direct benefit from the war, and after becoming the victorious nation, there will be a lot of hidden inco as well.
In a few years, France might not need to worry about the debt issue at all.
After understanding the revenue and expenditure situation for the first ten months, Joseph picked up the “France 1794 Fiscal Expenditure Estimate Report” compiled by the financial system.
He didn’t have much expectation for this report, as no country of this era had ever formulated a fiscal budget.
So he had Brian gather people from the major departnts of finance, industry, and agriculture to jointly form a budget committee, starting from estimating next year’s national expenditure to get so practice, with the plan to gradually improve towards budget formulation once enough talent and experience were accumulated.
During this era, national financial managent was still at a very primitive stage, essentially filling financial holes wherever they appeared. When the treasury ran out of money, they would desperately tighten expenditures, stopping everything.
Britain only started establishing its fiscal budget system 40 years later. Other countries were even later.
From the perspective of national financial managent, formulating a budget is very important.
Firstly, it can restrict unnecessary waste by pre-setting a strict budget cap, so even if you want to waste, there’s no extra funds allotted to you.
Secondly, it urges various departnts to improve their funding usage efficiency. If a departnt exceeds the budget, its head will certainly be punished, and saving the budget will earn rewards.
Don’t underestimate the subjective initiative of officials at all levels; saving a little here and there could easily save millions of francs nationwide by the end of the year.
And most importantly, it strengthens the governnt’s overall managent of financial resources, using limited fiscal resources where they are most needed.
For example, in the current era, a fiscal budget should definitely prioritize the developnt of steam engines and industries related to steam power, coal, and steel, thereby accelerating the entire nation in this direction.
Previously, France could surpass England in steam engine developnt because Joseph used his power to implent a partial national drive model, pitting all of France’s strength against one company, Watt.
If France still couldn’t compete at that point, it should stop talking about dominating Europe.
After implenting a national-level fiscal budget model, such a situation where the entire nation can break through important fields will beco the norm, allowing France to make greater progress even with the sa investnt compared to other powerful nations.
Brian said on the side, “Your Highness, according to the budget committee’s estimate, next year’s total fiscal expenditure should be around 850 million francs.”
Joseph nodded; this figure seed reasonable, so he opened the “Expenditure Estimate Report.” However, when he saw the pie chart of the expenditure composition, he frowned.
Routine project expenditures—including officials’ salaries, road and bridge maintenance, national debt interest, etc.—accounted for 55%.
Governnt investnt expenditures—such as hydraulic construction and road paving—accounted for 4.5%.
Industry and technology developnt expenditures—primarily the Industrial Developnt Fund and national-level technology research and developnt—accounted for 8%.
Governnt service expenditures—such as education and relief—accounted for 2.5%.
…
Joseph imdiately flipped through the pages to check the details of the industry and technology developnt expenditure, only to find that the annual investnt of the Industrial Developnt Fund was less than 35 million francs.
The projects involved were mainly concentrated in five important fields, including steam engines, automatic weaving, and chemistry, with no expenditure in any erging fields.
He imdiately raised his hand to interrupt Brian, who was continuously speaking, and looked at the Minister of Industry:
“Count Mirabeau, I believe I ntioned to you that we should heavily invest in inland shipping and postal communications next year, yet the Industrial Developnt Fund has no plans in this regard?”
“Yes, Your Highness, you did ntion it, more than once.” Mirabeau said, rubbing his hands awkwardly, “However, the financial budget is limited, and we must prioritize ensuring sectors like steam engines and steel slting…”
Joseph asked in confusion, “A total expenditure of 850 million francs, shouldn’t industry developnt receive at least over 100 million? How can it be insufficient?”
Mirabeau glanced at Brian and said, “Your Highness,”
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The ‘Tuscany issue’ seed to have finally been resolved in the 1731 Vienna Treaty. To gain recognition from Spain and its allies for the 1713 Pragmatic Sanction, Austria ultimately agreed to appoint Prince Carlos as the successor to Gian Gastone—during which no one cared about the Grand Duke’s opinion. On the contrary, the Grand Duke was also designated, along with the Duchess Dowager Dorothy Sophie of Parma, as the co-guardian for Prince Carlos. In October 1731, 30,000 Spanish troops entered the Grand Duchy of Tuscany on behalf of Carlos. Having been referred to as the Duke of Parma from January of the sa year, Carlos also arrived in Florence in March of the following year.
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