Swiss coffers will once again be fuller than expected

Where did that CHF2.2 billion come from? Keystone

The finance ministry, which had budgeted for a deficit for 2016 of CHF500 million ($517 million) is in fact projecting a surplus of CHF1.7 billion. Despite this, the government will move ahead with planned savings programmes.

The finance ministry put the apparition of an extra CHF2.2 billion down to “special factors”, mainly negative interest rates. It said on Wednesday that negative interest rates had resulted in more companies paying their direct federal taxes early (leading to an extra CHF900 million) or delaying claiming withholding tax (CHF300 million).

In addition, the interest rate situation meant the government saw higher surcharges on government bonds of CHF600 million.

Without these factors, the government said it would have been CHF100 million in the red.

Switzerland levies taxes at the federal, cantonal and local levels, with cantons setting their own rates.

Despite this windfall, the government said it intended to continue with its savings plans. The finance ministry believed the factors that had generated the surplus were not long-term, for example it expected interest rates to return to positive in 2018.

‘Deceptive rhetoric’

If the projections are confirmed, it wouldn’t be the first time that the federal budget has turned out to be a lot rosier than forecast.

Last year, the surplus of CHF2.34 billion comfortably exceeded the expected surplus of CHF400 million. In 2013, a deficit of CHF400 million turned into a surplus of CHF1.3 billion.

In fact, last year it was reported that over the past decade the cumulative surpluses had amounted to CHF27 billion while CHF200 million in losses had been budgeted for the overall period.

This “deceptive rhetoric on finances” was used to pursue a rightwing policy of austerity and to “dismantle state benefits”, said Social Democrat André Maire at the time.

The first confirmed deficit since 2005 was recorded in 2014, when a projected surplus of CHF121 million ended up CHF124 million in the red.