Raising the roof
Ceilings raised on key state subsidies in France, lifting tax thresholds amidst a cost-of-living crisis
French MPs are raising the roof.
Not in the secret parliamentary bar, however, but rather in the reforms they’re making.
With the cost-of-living crisis on everyone’s lips, it’s the tax-free “ceilings” of numerous state subsidies that France’s députés have their eyes on raising.
One dividend up for ceiling renovation is the prime transport, which businesses can pay their employees to help them cover travel expenses.
News broke on Friday that Ms Borne and her finance minister, Bruno Le Maire, will raise the tax-free threshold from €200 to €400.
In what some are calling a summer of discontent, Ms Borne is perhaps wise to be talking about workers’ fuel tanks and train tickets.
After all, it was fuel prices that moved the gilets jaunes protest movement to don their emergency yellow vests in 2018.
Friday also saw MPs vote to re-do the roof on overtime payments, which will have its ceiling raised from €5,000 to €7,000.
Some might say it shows France’s lower house can compromise - something that’s all the more important now that the governing centrist coalition no longer has a majority.
The centre-right parliamentary grouping Les Républicains (LR) had originally hoped for “a full tax lift on overtime” - something that was in the party’s presidential hopeful Valerie Pécresse’s campaign manifesto.
In the end, it appears a concession was made with the Government to raise the threshold only partially to €7,000, which also got the backing of the far-right Rassemblement national (RN).
One MP from LR hailed the move as “a purchasing power win for employees [which] gives businesses room to manoeuvre”, whilst another from RN called it a measure that highlights the value of work.
But politicians from the Parti socialiste, the radical left La France Insoumise and the Greens called for a rise in the national minumum wage and a reduction in working hours.
However, one possible argument against the move that doesn’t seem to have made the headlines is that the overtime tax-break will last only until the end of 2022. Will the French people want more in five months?
Food ever being the priority in France, the so-called titre journalier also had ceiling reinforcement blueprints laid on Friday.
If employees in organisations larger than 25 have no canteen at work, companies must pay them a daily restaurant ticket. It was announced on Friday that the amount employees can receive will rise from €19 to €25.
Finance Minister Le Maire said it was a “good idea” and, encapsulating a spirit of compromise, noted that “it is a suggestion made by Republican MPs just as much as socialists or greens.”
Many will welcome the move as their belts tighten, but others will see it only as a partial win.
According to Le Figaro, these tickets appear in fact to have been worth a maximum of €38 between the first lockdown and the start of July 2022 - a benefit raise made during the first lockdown.
The “purchasing power” crisis is a massive priority in France. According to one economist, it weighs on minds more than health or climate change-related issues.
So little wonder there’s appetite for support.
That being said, the provision of state support in times of crisis isn’t something new. There is a long-standing attitude that the state be at the centre of French public life.
In a foggy financial climate, one thing is certain. It’ll be the French people who decide whether this week’s ceiling renovations hold or collapse.