I'm the Dauphin in France

Chapter 865 National Budget System
This is also the reason why Prussia was the first to withdraw from the war - if it continued to fight, its country would go bankrupt.

In fact, Prussia has been able to survive until now entirely thanks to funding from Britain.

Brian saw the Dauphin turning the page and immediately said:

"Your Highness, the total expenditure for the first ten months of this year is 6 million francs, and the total expenditure for the whole year is expected to be 5 million francs. In other words, there will be a deficit of 8 million francs."

Since Joseph took office, France has had a fiscal surplus for two consecutive years, with last year's surplus reaching 1 million francs.

This year, due to the huge consumption of war, the situation of deficit again emerged.

Joseph looked at the total national debt at the bottom of the report, 18 billion francs.

He smiled nonchalantly and said to Brian, "Our domestic production has not been seriously disrupted, and the Iberian-Apennine Common Market will bring greater sales to the factory. I believe that our revenue and expenditure situation will be reversed soon after the war."

What he didn't say was that France would most likely win the war, and would receive high war reparations, plus various war dividends, and its fiscal revenue would certainly increase significantly.

When he was in the Southern Netherlands, he had estimated that the war reparations that the Netherlands paid to the Flemish Republic alone, after being transferred to France through various channels, would be able to reduce France's national debt by nearly 2 million francs!
Moreover, this money will not have the common problem of war reparations - the defeated country pays a small part and then refuses to pay.

About 4 million of France's national debt was borrowed from the Dutch Bank. Previously, Flemish stipulated in the armistice agreement that war reparations would be secured by the debts of Britain, France and other countries.

In other words, if the Netherlands wants to default on its debt, it can directly deduct it from France's debt.

Later, Austria will also be able to provide a large amount of war reparations - Austria is not as poor as Prussia, and Guangrao's empire can squeeze a lot of money out of it.

Even if the war reparations are not paid in full, it can at least help France reduce its debt by another 100 or 200 million.

By then, France's total debt will be reduced to less than 15 billion.

You have to know that this is only the direct benefit brought by the war. As the victorious country, there will be a lot of hidden income.

In a few years, France will no longer have to worry about its debt.

After Joseph learned about the income and expenditure situation of the first ten months, he picked up the "Estimate Report on French Fiscal Expenditure in 1794" compiled by the financial system.

He did not have high expectations for this report. After all, no country in this era would formulate a fiscal budget.

So he asked Brian to convene people from the finance, industry, and agriculture departments to jointly form a budget committee. They would start by estimating next year's national expenditures, and then gradually move on to budget formulation after accumulating enough talent and experience.

The national fiscal management of this era was still at a very rudimentary stage, and basically they filled in holes wherever they were. When there was no money in the treasury, they tightened their belts and were not allowed to do anything.

It was not until 40 years later that the UK began to establish a fiscal budget system, and other countries were even later.

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

The first is to limit unnecessary waste. Your budget will be limited in advance, so there will be no extra funds allocated to you even if you want to waste.

The second is to urge all departments to improve the efficiency of fund use. If the budget is exceeded, the head of the department will be punished, and if the budget is saved, there will be rewards. Don't underestimate the subjective initiative of officials at all levels. If everyone saves a little, it is not surprising that the country can save tens of millions of francs in a year.

The most important thing is to strengthen the government's overall management of financial resources and use limited finances 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, so as to drive the entire country to accelerate in this direction.

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

If France still cannot win this battle, then it should forget about competing for hegemony in Europe.

After the implementation of the national fiscal budget model, this situation of pooling national efforts to make breakthroughs in certain important areas will become the norm, allowing France and other powerful countries to achieve greater progress with the same investment of funds.

Brian said, "Your Highness, according to the Budget Committee's estimate, next year's total fiscal expenditure should be around 8 million francs."

Joseph nodded, thinking that the number was roughly reliable, so he opened the "Expenditure Estimate Report", but when he saw the total expenditure item, he immediately frowned.

Current expenditures—that is, official salaries, road and bridge maintenance, interest on the national debt, and so on—accounted for 50 percent.

Government investment spending - such as water conservancy projects and road paving - accounted for 4.5%.

Industrial and technological development spending - mainly industrial development funds and national-level technological research and development - accounted for 8%.

Government service spending - education, relief and the like - accounted for 1.5%.

……

Joseph immediately flipped back to check the details of the industrial and technological development expenditures that he was most concerned about, and saw that the annual investment of the Industrial Development Fund was less than 3 million francs.

The projects involved were mainly concentrated in five important areas, including steam engines, automatic textiles, and chemicals, and there was no spending in any emerging areas.

He immediately raised his hand to interrupt Brian who was still talking, and looked at the Minister of Industry:
"Count Mirabeau, I remember telling you that we would invest heavily in inland shipping and postal communications next year, but the Industrial Development Fund has no plans in this regard?"

"Yes, Your Highness, you did say that, more than once." Mirabeau rubbed his hands in embarrassment, "But the financial funds are limited, and we must give priority to industries such as steam engines and steel smelting. There is not enough for other aspects..."

Joseph wondered, "With a total expenditure of 8 million francs, industrial development should get at least 5 million francs, right? How could it not be enough?"

Mirabeau glanced at Briand and said, "Your Highness, next year's military expenditure must be the most important, so we can only cut back on industrial development first."

Joseph quickly flipped forward again and saw the last item of expenditure: military expenditure, accounting for 36%.

He roughly calculated that the total expenditure of 8 million would be more than 5 million francs, 36%!

He frowned and shook his head, "The military budget shouldn't be that high, right?"

You know, we have been fighting a full-scale war for half a year this year, and the military expenditure is only about 1 million. Does Brian think that we will have to fight a whole year of national war next year?
(End of this chapter)