Energy tax reform runs out of steam

A proposed new levy on non-renewable energy came in for a veritable routing from voters Keystone

A proposal replacing the main consumer tax with a new levy on non-renewable energy has suffered a blistering defeat in Sunday’s nationwide ballot. It scored one of the worst results in modern Swiss history.

The proposal by the Liberal Green Party won only 8% of the vote, according to final official results. Turnout reached a long-term average of 41.6%.

The small centrist party had hoped to fuel the political debate about the use of petroleum, gas, coal and uranium, but had little backing from other groups. Parliament, the government, the business community and the 26 cantons with their far-reaching fiscal autonomy had all come out against it.

The initiative suggested introducing a new tax on such energy resources and scrapping the current value-added tax (VAT), which yields CHF22 billion ($22.7 billion) annually.

Martin Bäumle, president of the Liberal Green Party, admitted defeat early on.

“It was obviously too big a leap. But I’m convinced that the initiative helped put the issue of an ecological tax reform on the political agenda.”

Tiana Angelina Moser, Liberal Green parliamentarian, was disappointed by massive rejection. She said it showed that the current economic uncertainties and the strong Swiss franc had badly limited voters’ willingness to accept a tax reform.

She said efforts have to continue to reduce greenhouse gas emissions and move towards a more sustainable energy use.

However, Moser dismissed criticism that the party undermined its credibility ahead of October’s parliamentary elections. 

Reaction

Finance Minister Eveline-Widmer-Schlumpf welcomed the outcome of Sunday’s vote.

“She said approval of the initiative would have posed a major challenge for the government and the country’s social security system.”

VAT contributes more than a third of the annual government revenue.

However, she dismissed allegations that the overwhelming rejection was a setback for discussions about a shift in energy policy.

“A majority of the people is sensitive towards energy issues and prefers a realistic step-by-step approach,” she said.

Energy discussions

The vote came as discussions are continuing in parliament on the government’s energy strategy, including the decision to phase out nuclear energy by 2034 and a system of subsidies for the promotion of energy-saving technologies.

The government is shortly due to present its own proposal for ecological tax reform.

Widmer-Schlumpf on Sunday reiterated that the plans would include elements of the Liberal Green initiative, but proceed gradually.

It is believed to include tax increases on petrol and heating oil against reductions in health premium payments.

Efforts are also under way to review the system of VAT, which was introduced in 1995. The main consumer tax currently stands at 8%, with reduced rates for food products and the tourism sector.

Historic

Sunday’s result was the second worst in modern Swiss history.

Political scientist Claude Longchamp of the GfS Bern research and polling institute said the latest figure reflected the increasing economic uncertainty following a controversial monetary decision by the Swiss National Bank in January.

“Voters probably felt it is the wrong time for political experiments. They may also have shown a certain disinterest in radical initiatives,” he added.

So far Swiss voters have rejected 198 initiatives. Only 22 have won a majority a the ballot box since 1891 when the citizen’s right to amend the constitution was introduced.

Previous ballots about proposed tax reforms – such as boosting renewable energy or funding the old-age pension scheme – have all failed over the past 15 years.

Vote March 8, 2015 – Results

Energy tax:

Yes: 8%

No: 92%

Tax deductible child allowances:

Yes: 24.6%

No: 75.4%

Turnout: 41.6%

About 194,000 citizens, mostly Swiss Abroad, were able to vote online as part of ongoing trials with e-voting. 14.7% of them used it, according to the Federal Chancellery.