To save or not to save – that is the federal budget question

Reduce debt, lower taxes or invest? What to do with budget surpluses? Keystone/ TI-Press / Gabriele Putzu

How much should Switzerland tighten its belt? That’s the big question facing politicians in the House of Representatives on Wednesday, when they debate next year’s budget. 

A look at budgets over the past ten years shows that, with one exception, the government always does far better than expected. So, does saving money actually make sense? 

Over the ten years, the government ended up with CHF25 billion ($25.4 billion) more in its coffers than it had counted on – an average of more than CHF2 billion a year. 

This is reason enough to bin any further cutback programmes, believes Margret Kiener Nellen from the leftwing Social Democratic Party. “This zigzagging is completely inefficient – a lower budget then a surplus. Smoothing this out is for me the most pressing issue,” she says. 

“That would be completely the wrong path,” counters Hans-Ulrich Bigler from the centre-right Radical Party. He says better than expected accounts are often a result of special effects – for example, many companies had paid their taxes in advances owing to the negative interest rates. 

This year is already also looking like producing a budget surplus of CHF1 billion. Kiener Nellen wants to allow parliament to spend this money during the year, rather than hoard it. 

“Every franc spent by the government is either a wage franc, a consumer franc or an investment franc,” she says. 

Bigler, on the other hand, is demanding that surpluses continue to be used for debt reduction. “We could also raise the question about when would be the right moment for tax reductions,” he says.

What is clear is that the argument over the budget has started, with the two-and-half-day debate expected to be a heated exchange. 

(Translated from German by Thomas Stephens)