by Switzerland’s federal government is spending more money than it collects in taxes. This week, a federal commission set out options for spending cuts, reported SRF. The problem is than some of them would involve less federal money going to cantonal governments. Bern © Victor Torres | Dreamstime.comSwitzerland’s Finance Minister Karin Keller-Sutter hopes to break the deadlock around balancing the federal budget. To do so, she has called on a group of experts for advice. This week, a group led by Serge Gaillard, a former trade unionist and director of the federal financial administration presented its suggestions. According to the group, taking on more debt is out of the question and something that was not looked at in any detail. It advises instead to focus primarily on cutting
Topics:
Investec considers the following as important: Editor's Choice, Personal finance, Politics
This could be interesting, too:
Investec writes Swiss want more political action on immigration
Investec writes Swiss Rail financial results disappoint
Investec writes Travelling by car becoming increasingly cheaper than public transport in Switzerland
Investec writes Electricity price cuts for 2025 by region
Switzerland’s federal government is spending more money than it collects in taxes. This week, a federal commission set out options for spending cuts, reported SRF. The problem is than some of them would involve less federal money going to cantonal governments.
Switzerland’s Finance Minister Karin Keller-Sutter hopes to break the deadlock around balancing the federal budget. To do so, she has called on a group of experts for advice.
This week, a group led by Serge Gaillard, a former trade unionist and director of the federal financial administration presented its suggestions. According to the group, taking on more debt is out of the question and something that was not looked at in any detail. It advises instead to focus primarily on cutting spending. The view of the commission broadly in line with Keller-Sutter’s: that the federal government has a spending problem, not a revenue problem.
The experts propose cuts in almost all areas that would yield savings of CHF 5 billion. Savings at this level would give the federal government room to manœuvre. Currently, the Federal Council and Parliament have no fiscal room for new projects because of forecast deficits of billions of francs.
Suggested areas of saving include spending on climate change mitigation and cutting funding to cantons. Climate subsidies voted in with last years climate protection referendum add up to several billion a year. Climate protection policies should focus more on tax breaks and less on subsidies. This would allow some of the slated spending on subsidies to be clawed back.
The group also advises providing less money to the cantons. They should receive less and bear more of their own costs. Subsidising childcare should be funded by cantons, not the federal government. Shifting more of the financial burden of this onto the cantons could save CHF 1.5 billion annually, estimates the commission.
Another area of suggested savings is agricultural payments. Switzerland has one of the world’s most heavily supported farming sectors. Small cuts here could add up to big savings.
The challenge comes when such bills reach the Council of States, Switzerland’s upper house. The Council of States in made up of two representatives from each canton (one from half cantons). Cantonal representatives are generally against laws that penalise cantons.
Although the Finance Minister wants to act urgently on the matter, it is likely that little will happen when cantonal governments lean on their representatives in the Council of States.
More on this:
SFR article (in German)
For more stories like this on Switzerland follow us on Facebook and Twitter.