Means-test family allowance: Attali

A NEW report by the Attali commission has suggested hard-line savings such as making people with serious long-term illnesses pay for part of their treatment, or means-testing family allowance.

The Commission for the Liberation of French Growth, an independent think-tank set up by the government and presided over by economist Jacques Attali, last reported in 2008 with a list of ideas for boosting the economy.

Its new report, meant to help the government bring France out of the recession, has suggested a similar policy to one causing controversy across the Channel: axing family allowance for the better-off. However Family Minister Nadine Morano has said this is off-limits. “Family allowance is universal, not means-tested. We are very much attached to this policy, so there is no question of taking up this suggestion,” she said.

Another suggestion, increasing VAT and using the proceeds for social security, has similarly been ruled out already, this time by Prime Minister François Fillon. Other tough proposals include watering down the existing policy of free medical care for people with certain long-term illnesses, such as cancer, in relation to treatment for the illness in question.

The president of the National Assembly’s Economic Affairs Commission, Patrick Ollier, said certain suggestions would reduce debt if taken up, but were politically difficult or impossible because they would be so unpopular.

However according to leading economics newspaper Les Echos, the bulk of the new report is more conservative than the last one, which was noted for “out-of-the-box thinking” such as opening up regulated professions to competition, removing the department tier of local government, creating new eco-towns etc.

President Sarkozy said it is generally in line with his thinking: it recommends cutting public spending and reducing niches fiscales (various ways in which people can invest so as to reduce their income tax bills), but not increasing income tax itself. It is “very useful food for thought for the debate on the reforms that need to be made to safeguard the future of France”, he said.

Other ideas in the report include extending the current policy of not replacing one retiring civil servant in two to local councils and social security bodies, and freezing public sector pay until 2013.

The Attali commission was set up originally in 2007 and includes 40 thinkers from different fields, including the British historian Theodore Zeldin.

Niccolò Caranti