Parliament gives go-ahead to budget cuts

The public-spending cuts programme means federal officials can no longer be sure of their positions Keystone

Parliament has finalised federal budget cuts aimed at saving SFr4.8 billion ($3.7 billion) between 2006-2008.

The House of Representatives on Wednesday ironed out its last differences with the Senate, paving the way for the savings package to be implemented.

The government’s savings target was narrowly missed. It wanted to save SFr4.904 billion but parliament agreed on SFr4.839 – SFr65 million less.

Most of the cutbacks will be in social welfare, transport, the military, education and research, agriculture and foreign affairs. Asylum and development aid will be strongly affected.

Reacting to the news, Finance Minister Hans-Rudolf Merz said it was a “satisfactory result”, adding that he thought the programme was well balanced.

The government and parliament want to use the 2004 public-spending cuts programme to get rid of the structural deficit and to straighten out the budget.

In 2006 savings are expected to amount to SFr1.136 billion, in 2007 SFr1.801 billion and in 2008 SFr1.902 billion.

Total federal spending in 2004 reached SFr50.29 billion, resulting in a further – but already much reduced – deficit of about SFr1.6 billion. Total government debt was nearly SFr127 billion, or just under 29 per cent of gross domestic product (GDP).

Political reaction

The final parliamentary vote on the matter on Friday is the last hurdle for the cuts.

The Left and the Greens are expected to vote “no”. “A savings programme that increases unemployment so much can’t be right,” said Hans-Jürg Fehr, president of the centre-left Social Democrats.

Most of the rightwing People’s Party will support the programme despite having some reservations.

“It is a step in the right direction,” said the party’s Caspar Baader. “But we wanted it to go further.”

The Christian Democrats and Radicals were by and large satisfied, the latter especially because the cantons would not be too hard hit by the plan.

Doris Leuthard, the president of the Christian Democrats, said it was necessary to approve the cuts because the federal finances were still in a bad way.

swissinfo with agencies

In brief

The 2004 public-spending cuts programme has set cuts of SFr4.84 billion between 2006 and 2008.

The government’s savings target was narrowly missed by SFr65 million.

The government and populist parties welcomed the programme. Leftwingers and Greens criticised it.