Macron pledges more tax cuts to quell protests

French President Emmanuel Macron at a news conference to unveil his policy response to the "yellow vest" protests. He has offered €5 billion (S$7.6 billion) of cuts to income tax and has promised education reforms.
French President Emmanuel Macron at a news conference to unveil his policy response to the "yellow vest" protests. He has offered €5 billion (S$7.6 billion) of cuts to income tax and has promised education reforms.PHOTO: REUTERS

But 63% of French voters polled unconvinced by package

PARIS • President Emmanuel Macron has promised a new wave of tax cuts for France's middle classes as he seeks to placate "yellow vest" protesters and reinvigorate his flagging presidency.

After almost six months of often violent demonstrations, his speech on Thursday night was meant to be the moment when the 41-year-old leader would show he had heard the grievances and had a solution.

What he offered was a mixture of defiance, digging in on his pro-business overhauls, and some soul-searching - "I've learnt a lot" - that early polling shows has failed to move voters.

"I have felt in my bones what French people are going through and I want to provide an answer," he said. "The art of being French is being rooted and universal, attached to history and origins but embracing the future."

It was a highly choreographed affair: a news conference stretching more than two hours in a gilded hall at the Elysee Palace. The event had been delayed by the fire at Notre-Dame Cathedral in Paris that brought the nation briefly together.

Yet, the culmination of the national debate, as he dubbed his two-month engagement with citizens around the country, seemed to offer little that was exciting or surprising to them.

  • New measures

  • PARIS • French President Emmanuel Macron has outlined several new measures he hopes will bring an end to months of "yellow vest" protests across the country.

    TAX CUTS 

    Mr Macron said he wanted to "significantly" reduce income tax to alleviate the burden on the middle class. He outlined some of the ways the tax cuts would be financed, including by closing some corporate tax loopholes, making people work more and cutting public spending.

    ON WORKING MORE AND RETIREMENT 

    Mr Macron said he did not wish to push back the legal retirement age beyond the current threshold of 62. But he also outlined the need for measures that would require French citizens to contribute for a longer period to the pension system before retiring.

    ON SCHOOLS AND HOSPITALS 

    Mr Macron said the government would "maintain public service (in the countryside)... guarantee the access for all to health services and guarantee that no school or hospital will be closed without the mayor's approval".

    ON REFORMING CIVIL SERVICE AND ELITE SCHOOLS 

    Mr Macron said he would aspire to reform the country's senior public service, arguing that it was not a meritocratic system any more. In this regard, he confirmed that he would scrap the Ecole Nationale d'Administration, an elite postgraduate school.

    ON SCRAPPING FRANCE'S WEALTH TAX 

    Mr Macron ruled out reintroducing the wealth tax that his government replaced by a tax on lucrative property deals and real estate assets, but promised a review in 2020.

    ON IMMIGRATION 

    Mr Macron called for better control of borders at the national and European level. He said changes should be brought to the Schengen Area, even if it led to a reduction of its scope or to fewer member states. 

    REUTERS

Voters were disappointed by the package, with 63 per cent of respondents saying they were unconvinced in a poll by Harris Interactive and Agence Epoka.

There was another €5 billion (S$7.6 billion) of cuts to income tax, following a €10 billion package of concessions in December. Mr Macron said he would peg any state pensions under €2,000 a month to the rate of inflation from next year.

He said the measures would be paid for by closing tax breaks for companies and incentives for people to work for longer.

Finance Minister Bruno Le Maire suggested that those details have not been properly nailed down yet though.

In an interview broadcast yesterday on LCI television, Mr Le Maire pledged to cut spending to finance the tax cuts. "Every euro of reduction in income tax should be financed by a €1 cut in public spending," he said.

Mr Macron dug in by not retracting painful reforms, but he pledged to do more to make his agenda more human and do a better job of protecting the nation's citizens from globalisation. "We haven't always put the human at the heart of our project," he said. "I've given off the feeling of always giving orders. Of being unfair."

The tax announcements, the most novel aspect of the package, mark a further shift in favour of consumers over businesses.

Other announcements ranged from promises to revamp the mechanics of the French state to education reforms.

He even said he will scrap Ecole Nationale d'Administration, the elite school where he studied, to make the upper echelons of the French system more accessible.

Almost two years after coming to power, Mr Macron's promise of deep reforms to jolt France's economy and labour market have collided with protests that began with opposition to petrol taxes before morphing into a general unrest over purchasing power and Mr Macron's governing style.

The French President dodged the question of whether he will run for re-election in 2022, saying he is "furiously and passionately" focused on making his first time a success.

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A version of this article appeared in the print edition of The Straits Times on April 27, 2019, with the headline 'Macron pledges more tax cuts to quell protests'. Print Edition | Subscribe