Purchasing power law: the key measures, why it blocks in the Assembly

PURCHASING POWER LAW 2022. From this Monday, July 18, 2022, the “purchasing power” law is debated in the National Assembly. Heated debates ensued. We detail the issues.

[Mis à jour le 18 juillet 2022 à 19h34] The purchasing power law is finally under study in the National Assembly. This Monday, July 18, 2022, the debates began within the hemicycle. And the least we can say is that the discussions are likely to last. One of the sticking points of the day was that of the bonuses promised by the presidential majority, within the framework of this new standard. La Nupes, through the voice of Adrien Quatennens, advocates, rather, an increase in salaries: “We are here on the essential, the sharing of value. These are not bonuses, these are salary increases, offering the conditions for the workers of a dignified life and to live from their work.” Similarly François Ruffin (LFI) castigated Bruno Le Maire, Minister of the Economy, who presented the bill, calling him “the best of liars”, and regretting, in turn, that there is ” nothing on wages”: “You are playing Pontius Pilate by seeing this again in the negotiation of the branches, but the negotiation of branches, it has been skating for two years in all these trades and that you have done nothing to move it forward.”

We’re starting to get used to it, but a game of three-cushion billiards has once again taken hold in the Assembly. If the National Rally group regrets that Emmanuel Macron’s proposals do not go far enough, they have attacked the union of the left, accusing it of not thinking of the French. Marine Le Pen took advantage of her speaking time to strongly criticize the bill: “Finally, the poverty of the text that you present to us demonstrates that this posture was nothing but cynicism, your measures, simple transpositions of the presidential project of Emmanuel Macron, therefore, appears unjust, ineffective and already obsolete. Obsolete like Emmanuel Macron, who suffers from a serious form of presidential denial, prisoner of a palace where he still thinks he controls everything, while the people ‘outvoted the National Assembly. But, to finish, she indicated that her group would vote “the essential measures” that the government will propose, in a constructive spirit as requested by the French, according to her. In fewer numbers than the other opposition deputies, the Republican deputies have, for their part, endeavored to extend the possibility of access to the famous Macron bonus, in question today. The amendments tabled to this effect were rejected.

In a context of high inflation reinforced by the war in Ukraine, the government is putting on the table a series of measures to revalue social minima, but also retirement pensions, APL and the index point. The purchasing power bill also provides for the temporary supervision of energy prices and rents. Here are the essentials of the measures presented on Thursday, July 7.

Revaluation of social benefits

• The 4% revaluation of social minima: this increase concerns the Solidarity Activity Income (RSA), the Disabled Adult Allowance (AAH) and the Solidarity Allowance for the Elderly (Aspa).
• Indexation of pensions to inflation: basic pensions will be immediately increased by 4%, while a minimum retirement pension will be set at 1,100 euros.

Targeted aid for constrained expenses

• An increase in housing assistance (PLA) by 3.5% and the implementation of a shield on rents, aimed at limiting their increase to a maximum of 3.5% until the second quarter of 2023.
• A food check for the 9 million poorest households, worth 100 euros, plus 50 euros per dependent child.
• Several support measures in the face of the fuel price increase: the fuel discount of 18 cents per litre, introduced in April, will be extended unchanged until the end of August, after which it should gradually decrease until it disappears in December. It will be replaced by an “indemnity fuel workers”, for which all employees going to work by car will be able to apply from October: this will range from €100 to €200, with an increase for workers living more than 30km from their home. The project also provides for an increase the ceiling of the “tax-free individual transport bonus”: paid by employers to employees using their car to get to work, the ceiling of this bonus could go from 200 to 400 euros.
• The extension of the “tariff shield”: implemented in the fall of 2021, this measure will be extended until the end of 2022 and provides for the freezing of the price of gas and the limitation of the price of electricity below 4% of rise. Bruno Le Maire promised that there would be “no catch-up” at the start of 2023.

Revalorization of work

• The 4% increase in the activity bonus, paid to workers with low incomes.
• Unfreezing of the index point for civil servants: a revaluation of 3.5% of the point was applied from July 1st.
• The tripling of the Macron bonus: this “exceptional tax-free and desocialized purchasing power bonus” is paid by the employer to the employee on a voluntary basis, and was previously capped at 1000. It could now reach 3000 euro. For companies that have signed a profit-sharing agreement and companies with fewer than 50 employees, the bonus ceiling would increase from 2,000 to 6,000 euros. In addition, companies will be able to split the payment over the year .
• A reduction in the contributions of self-employed workers, which would benefit two-thirds of them.
• The simplification of profit-sharing agreements by unilateral decision in companies with fewer than 50 employees.

The amount of the civil service index point has been totally frozen since 2017. Indeed, for more than 5 years, no general increase in the remuneration of public officials has taken place. Only a few categorical increases have been implemented by Emmanuel Macron since his election as President of the Republic in 2017. But as of this year, the civil service index point will experience a further increase! An increase which should be between 1% and 4%. As a reminder, a general increase of 1% would cost the State 2 billion euros per year. The various unions were demanding an increase of between 3% and 20%. The final amount of the increase in the index point will be known on Tuesday, June 28, 2022.

What measures does the opposition propose for purchasing power?

Tuesday, July 5, the deputies of the New Popular Ecological and Social Union presented their own bill on purchasing power, ahead of the text prepared by the government. The Nupes proposals take up the main points of the common program drawn up during the legislative campaign: increase in the minimum wage to 1,500 euros net, blocking of the prices of basic necessities and energy, revaluation of 10% of housing aid (APL) and the index point of civil servants. To finance these measures, the Nupes proposes an exceptional tax on the “super-profits” of several large companies. The left coalition should try to insert these proposals in the government’s purchasing power bill, in the form of amendments.

For their part, the LR deputies also sent Matignon at the start of the week their proposals for purchasing power. They propose, for example, that the cost of petrol be guaranteed at 1.50 euros per litre, but also a reduction in the CSG (general social security contribution) on well-to-do pensions aimed at offsetting the previous increases, or even a general reduction in employee contributions aimed at raising take-home pay.

The purchasing power bill was a government campaign promise before the legislative elections. He finally arrived only Thursday, July 7 in the Council of Ministers. His examination in the National Assembly will begin on July 18. The text, very dense and rich in controversial points, should however be the subject of long debates in the new hemicycle. The President of the Assembly, Yaël Braun-Pivet, confided on July 3 on France 3 to hope to see the adoption of the text “before the end of July, the beginning of August maximum”, for entry into force of most of the measures at the start of September.