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FACTBOX-Industry review proposes cuts to French payroll tax

PARIS, Nov 5 (Reuters) - French industrialist Louis Gallois called for a patriotic effort to support shock therapy to reverse declining competitiveness on Monday as he handed in a review the Socialist government commissioned and is now under pressure to heed.

Following are some of the most important of his 22 proposals:

* Reduce payroll contributions by 30 billion euros - 20 billion from the charges paid by employers and 10 billion from those paid by workers - and compensate with spending cuts and extra consumer taxes, including higher VAT and a carbon tax. This would ideally happen within a year and in under two years at most. A separate levy, the CSG, that is paid on rental and investment income and pensions as well as wages would be raised.

* Maintain over the government's five-year term various business-friendly measures currently in place including tax credits and public financing for research and innovation, and special incentives for start-ups. Avoid imposing new layers of regulation. This would ensure better long-term visibility for small firms grappling today with frequent legal changes.

* Create a French ``Small Business Act'' to bolster small and medium-sized firms. Also create equivalents of British and U.S. initiatives to steer a small percentage of public contracts towards innovative products from small businesses.

* Reduce the legal and fiscal obstacles for small firms seeking to grow into mid-sized companies, to address the lack of an equivalent to the ``Mittelstand'' that are the backbone of Germany's economy. Encourage mentoring of small business owners by big business to further help companies grow.

* Alter tax rules for life insurance funds to provide incentives to invest more in shares over bonds, including stock in unlisted companies. Undertake fiscal reforms to make it easier for small businesses to access investment capital. Double the capacity of the Public Investment Bank over five years.

* Improve support for exporters by simplifying conditions to access export credits and a creating a framework for smaller companies to group together to better access export markets.

* Admit four employees to the boards of directors of companies with more than 5,000 staff, to improve decision-making and spread responsibility beyond management.

* Improve vocational training and set up more partnerships between educational centres and professional bodies to ensure companies can find the talent they need. Encourage youths to pursue studies in science and technology.

* Continue research into the viability of exploring what are possibly the biggest shale gas reserves in Western Europe and a potentially lucrative industry, despite environmental concerns.

(Reporting by Catherine Bremer; Editing by Peter Graff)