The Viavoice - BPCE barometer survey of French consumer plans - January 2012

Nearly eight out of ten French people believe that the tax system is "unfair"

This edition of the monthly barometer of French projects is full of information on the current economic outlook, which is expected to have a major impact on the upcoming political milestones. Three months from the first round of the Presidential election, economic optimism in France is continuing to deteriorate:

• The majority of French people still believe that their purchasing power will decrease (54%);
• Increasingly, they plan to spend less money over the coming months, which is likely to drag down overall household consumption.

Against this difficult backdrop, this survey also reveals the existence, within public opinion, of a clear feeling of injustice in terms of the tax system: nearly eight out of ten French people (79%) currently believe that the tax system in France is "unfair".

Purchasing power: increasing concerns over energy (gasoline and electricity)

Concerns over purchasing power have remained stable overall, and high (54%).

In contrast, they are increasingly focusing on spending on gasoline and electricity, while hydrocarbons are hitting record levels and the Energy Regulatory Commission has just announced a 30% increase in electricity prices by 2016.

• 43% of French people state that gasoline is one of the most worrying expenses in terms of their purchasing power, an increase of five points. As such, we are returning to the levels seen in the first quarter of 2011 (48% in May), when prices were rocketing due to the Arab Spring.
• 35% are concerned about electricity, a three-point increase since December and an 11-point rise since November.

Spending forecasts down for the second consecutive month

The recession announced for the first quarter of 2012 is clearly expected to have an impact on consumption, as indicated by the French public's spending intentions for the coming months:

• 40% plan to "spend less money" over the next three months on food and clothing, a four-point increase since December and an eight-point rise since November 2011. In contrast, only 10% (+1) of French people plan to spend more money.
• Intentions to spend money on real estate are also down, with 3% of respondents (-1) planning to purchase a house or apartment over the next three months.

To a lesser extent, savings could also be impacted by the current household situation, with only 8% of French people planning to "save more money" than in recent months, a drop of two points. 32% (=) still plan to "save less money".

The tax system: what tax reform will take place over the coming months?

The tax question has become a key stake in public opinion for the coming years. This is not a normal situation:

• It is a result of the debt crisis, exacerbated at the beginning of the year by Standard and Poor's downgrading France's AAA rating, increasing the likelihood of higher mandatory contributions, whether before or after the Presidential election;
• The tax question is also at the forefront of concerns because it is related to the main issues of the forthcoming campaign: unemployment, purchasing power, inequality and fair division of efforts to combat the crisis.

So, against this difficult backdrop, nearly eight out of ten French people (79%) view the tax system as "unfair", with 37% viewing it as "very unfair". As such, this discontent appears very high, and clearly transcends the traditional political divides. This situation therefore requires a major overhaul of the tax system, a fiscal "new beginning" envisaged both by Nicolas Sarkozy and his administration (social VAT) and the main opposition candidates.

Over the coming months, each candidate's ability to convince the public of the relevance of their tax proposals, both in terms of effectiveness and fairness, is likely to be a key issue in the forthcoming Presidential and legislative elections.

For more information: the French barometer survey