Trésor-Info - Publications de la direction générale du Trésor - Tax-systemFlux de publication de la direction générale du Trésor - Tax-systemFluxArticlesTag-Tax-systemCopyright 20262025-02-27T00:00:00+01:00/favicon.pngDirection générale du Trésorhttps://localhost/sitepublic/contact@dgtresor.gouv.fr8a251a62-9504-49cd-8221-7ff6a5bdf82aThe Economic Issues Surrounding Redistribution to FamiliesHaving initially focused on supporting the birth rate, family policy now has three goals: contributing to offsetting family expenses, helping vulnerable families and ensuring a work-life balance. To this end, it has a large number of schemes that are sometimes difficult to understand. It nevertheless carries out significant redistribution from childless families to other families, especially large and single-parent ones.2025-02-27T00:00:00+01:00<p>Since its introduction in the 1930s, family policy has been resolutely directed towards childbirth goals by horizontal redistribution from childless households to those with children. The first major change took place in the 1970s with the start of vertical redistribution from wealthy families to low-income ones. Family policy expenditure now encompasses a large number of objectives, including support for early childhood and gender equality.</p>
<p>Family policy has adjusted itself to socio-demographic changes in recent decades, in particular the increase in women in the workforce and single-parent families.</p>
<p>Today, family policy has three main goals: contributing to offsetting family expenses, helping vulnerable families and ensuring a work-life balance. To achieve its targets, the policy comprises tax schemes (essentially income splitting, the quotient familial), universal or means-tested monetary allowances, increased welfare benefits depending on the age or number of children, and the provision of public childcare services.</p>
<p>The French welfare and tax system now focuses mainly on low-income families, single-parent families and large families for which the poverty rate is higher than for other families. Besides income levels and the number of children, the additional monetary benefits paid for having children depend on their age and birth order. Nevertheless, changes to welfare and tax transfers based on these criteria are not always commensurate with the increase in costs for families. In addition, the "layering" of schemes creates changes in the amount of means-tested benefits paid per child that are difficult to understand (see Chart).</p>
<p>Childcare options conducive to a work-life balance are thought to have a stronger impact on fertility rates than the monetary benefits under family policy.</p>
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<p style="text-align: center;"><img class="marge" title="TE-359en" src="/Articles/8a251a62-9504-49cd-8221-7ff6a5bdf82a/images/869274cf-928e-4aa1-a921-d816bc4bb9b1" alt="TE-359en" /></p>5a131e23-8ec0-4f38-8d38-aab2c3b1e7a7China's Public Finances: Short-Term Risks and Structural IssuesChina’s public finances are organised in a complex and opaque manner, and are structured into various accounts with unclear scopes, along with off-balance sheet commitments. The important role of public investment in China's growth has resulted in high debt levels for local governments. In the wake of the COVID-19 pandemic, local finances are at risk, which has made far-reaching reforms all the more necessary. 2023-05-23T00:00:00+02:00<p>Public finances have been a major driving force behind China’s growth, not least through public investment at the local level particularly since the 2008 crisis. In 2019, China’s public spending amounted to 24% of GDP according to official statistics, versus the 36% and 41% figures reported by the IMF and the OECD respectively. </p>
<p>Analysing China’s public finances is hindered by the lack of clarity in the definition of the prerogatives of various administrative levels (central, provincial, prefecture, county, city) in the Constitution of the People’s Republic of China and Chinese law, as well as by the fact that national laws often merely outline principles which are subsequently implemented at local level with significant leeway. The structure of public accounts is also based on opaque and complex methodology, lacking clarity on what spending falls within their scope, and the line between local and central government sometimes being blurred.</p>
<p>Public accounts structurally post a high level of deficit and debt. These two indicators have considerably worsened over the past few years, particularly as a result of the COVID-19 pandemic (see Chart). The situation at local level now emerges as a financial stability issue, with 57% of total government debt incurred at this level – according to official data – in a relatively <br />opaque way.</p>
<p>While local financial risks are high, a short-term systemic crisis seems unlikely given the guarantees granted by the central government and the fact that a large portion of the debt is held by major banks and local government entities.</p>
<p>Over the long term, imbalances and risks relating to public finances hamper growth and its necessary rebalancing, implying a shift from investments to domestic consumption. Despite the proactive stance of the authorities and the repeated recommendations of international observers, implementation of the reforms – a designated priority since 2013 – is still a slow and piecemeal process.</p>
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<p style="text-align: center;"><img class="marge" title="Visuel 1 TE-337en" src="/Articles/5a131e23-8ec0-4f38-8d38-aab2c3b1e7a7/images/fd29ad48-15f0-4b89-bed7-7705b7444a7d" alt="Visuel 1 TE-337en" /></p>