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French government plans new payment scheme to help motorists with fuel prices

The French Finance Minister has announced plans for a financial payment scheme to help low-income workers who rely on their vehicles to get to work, but are currently struggling with rising fuel prices

French government plans new payment scheme to help motorists with fuel prices
A motorist fills the tank of his car at a service station on Yeu Island in 2018. (Photo by SEBASTIEN SALOM GOMIS / AFP)

French Finance Minister Bruno Le Maire announced on Monday that the government plans to bring in a one-time subsidy to assist low-income workers who are obligated to use their vehicles to get to and from work. 

The finance minister made the announcement, which could affect up to 11 million households, on France Inter radio on Monday morning, saying that the current plan is for the subsidy to apply to those earning up to €1,600 per month.

The benefit could be extended to include up to 60 percent of the poorest people living in France, but the final income framework has not yet been announced.

The benefit is intended to help those who take their cars to work but can “no longer make ends meet because the price of fuel is too high,” said Le Maire.

As of Monday morning, the average price of Diesel is €2.06 per litre. Meanwhile, the price of petrol (SP95 – E5) is currently averaging at €2.09 per litre. For E10 petrol, the average price per litre is closer to two euros, standing at €2.03

Should the proposal be accepted by parliament, those who meet income and driving criteria will be able to take advantage of this fuel subsidy by logging on to the tax site and filling out an application for assistance. Then, the government will ensure that the applicant has a vehicle (by checking car insurance contracts) and does indeed meet the income criteria.

READ MORE: MAP: How to avoid paying too much for fuel when you’re driving in France

The proposal is for the fuel subsidy to be paid in one go at a fixed amount for all who fit the requirements, regardless of the distance driven to work (whether that be five or 30 km). That being said, frequent drivers, those who drive more than 12,000 km a year, will still benefit from a separate, pre-existing bonus specific to their situation.

The amounts of the subsidy have not yet been communicated and the timeline for when this would take effect is currently unknown, because the measure will first need to be voted on in parliament.

Currently, motorists benefit from a €0.18 cent subsidy per litre at the pump.

However, should the new payment for low-income drivers be put into effect, the current €0.18 subsidy would no longer be extended until the end of the year, as was planned, and would be instead be reduced “in stages.” 

Other plans to ease the cost-of-living crisis have also been proposed.

The left-wing has suggested lowering the VAT – the consumer-consumption tax – associated with fuel.

However, President Emmanuel Macron’s government has said that multiple proposals would not be possible at the same time due to financial constraints, so it remains to be seen how this proposition will fair after being debated and voted on in parliament.

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FRENCH POLITICS

What now for France’s public service broadcasters after TV licence axed?

Questions remain over the future of France’s public service broadcasters after bill abolishing annual €138 licence fee leaves future funding plans for the broadcasters vague.

What now for France's public service broadcasters after TV licence axed?

Households in France will no longer have to pay for an annual TV licence after parliament approved scrapping the annual €138 per household charge, meaning that this November the usual tax bill will simply not arrive.

The measure is part of a €65 billion package of financial aid to help people cope with the spiralling cost of living.

Revealed: What will you get from the cost-of-living package?

But abolishing the TV licence was not without its critics, while questions remain over the future funding of France’s public service broadcasters.

The €138 annual fee has been used to finance the TV and radio channels in the public sector.

It raises €3.7 billion a year – 65 percent of which is allocated to France Télévisions, 15.9 percent to Radio France, 7.5 percent to Arte, 7 percent to France Médias Monde, 2.4 percent to audiovisual archive agency INA and 2.1 percent to TV5 Monde, a Senate report revealed.

TV licence funding currently supplies about half of the total turnover of France Télévisions, while the rest comes from advertising.

Proposing the licence fee cut, president Emmanuel Macron said he wanted to define a budget “with multi-year visibility”, with fixed financing amounts. But, no long-term concrete plans are currently in place.

The government has said there is no question of public service broadcasters losing money, insisting it will replace the licence fee “euro for euro” with public subsidies financed by VAT. 

This model, however, is guaranteed only to the end of 2024 – after which the government will have to present different financing strategies to Parliament.

Despite the bill passing, Senators lined-up to criticise the absence of a concrete long-term funding strategy.

Les Républicains’ Jean-Raymond Hugonet said the plans were being pushed through too quickly for populist reasons and argued it was a change that should have come with a definitive public broadcasting strategy. 

Socialist senator David Assouline said Malak had “hailed the glory” of French public broadcasting but was “creating the conditions to weaken it”.

Assouline has long been a critic of the plan. “From the moment there is no more dedicated funding and we have to draw from the general state budget, we will end up being told that it all costs too much and that we have to cut expenses, close a channel, or even, as we already hear sometimes, privatise,” he told a demonstration against the plans in July.

Concerned staff at France Télévisions and Radio France went on strike at the end of June in protest at the changes, saying that getting rid of the fee amounted to a “threat” to the independence of the channels in question. 

Unions and cultural experts have expressed concern about the possibility that broadcasters’ independence would be eroded if financing was at the whim of the government of the time. Bruno Patino, the head of Arte France, has told AFP that he feared for his channel’s future if the funding model changed.

Another critic, cultural economist Françoise Benhamou told Le Monde: “The disadvantage of budgeting is that we are much less protected from the vagaries of politics, since the latter decides on the budget.”

And LFI MP and journalist Clémentine Autain said in July: “This is a highly political and dangerous measure. Democracy needs a strong public audiovisual service, with a fair financing system that guarantees independence.”

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