French government to introduce “Chèque Transport”

In order to help people facing the increase of petrol price, the French government proposed to introduce a new mechanism called "Chèque Transport", that would be funded by employers on a voluntary basis.

The employers would provide to their employees a set of tickets representing 50% of the price of public transport pass (about 200€ per year) to spend in public transport or 100€ per year to spend in fuel expenses, initially in the areas where public transport was not available.

However, the possibility to spend this amount for car expenses has been extended to people who "have to use their car for work purposes".

Half of this amount will be supported by the national budget as tax exemptions.

This proposal is rather controversial for several reasons:

• The possibility left to use this system for car expenses (the conditions are not detailed yet) makes the measure less incentive for the use of public transport.

• Despite growing the concern of disposable income, this scheme could provide a wrong market signal regarding petrol price and is probably not the best way to encourage energy savings on the long term.

• As it will be available on a voluntary basis, employers of biggest companies will probably benefit more from the "Chèque Transport" than those working for small and medium sized companies

• Expenses for other modes than public transport or private car as cycling won’t be covered by the "Chèque Transport" and therefore won’t be encouraged by this measure.The text is expected to be detailed soon and to pass the French Parliament during the Autumn. First "Chèques Transports" will be in January 2007

The text is expected to be detailed soon and to pass the French Parliament during the Autumn. First "Chèque Transport" will be in January 2007.