Cantons threaten referendum over budget cuts

Symbol of unity - the emblems of Switzerland and its 26 cantons in the parliament building dome swissinfo.ch

Parliament’s decision to vote through tax cuts totalling over SFr2 billion ($1.54 billion) is worrying the country’s already cash-strapped cantons.

Some of them are threatening to call a cantonal referendum – a democratic instrument that has existed since 1874 but never been used – to stop it becoming law.

As part of the 2001 fiscal package, which was approved by parliament in June, cantons stand to lose over SFr500 million in revenue under Switzerland’s complicated three-tier tax system.

The news has alarmed the cantons, whose finances have already been affected by the economic downturn.

In Bern, the cantonal parliament had already voted cuts worth SFr200 million. But under the federal proposals, the canton would have to shave between SFr250-260 million from its budget.

Power of veto

Bern is not the only canton to be concerned at the projected spending cuts. So far five cantons have voted in favour of a cantonal referendum.

This referendum, never used but enshrined in the Swiss constitution, would involve at least eight cantons joining together to prevent a proposal becoming law.

“The cantonal referendum was created to protect the cantons,” said Pascal Sciarini, a political scientist at the universities of Geneva and Lausanne.

“But it’s an extraneous body in a system of direct democracy. It’s not a popular right,” he added.

Sciarini said but that although it had been attempted before, the procedure hadn’t been implemented because it was quite a complicated process.

He explained that in most cantons the final decision on a referendum lay with the cantonal parliament or with the local population.

Last straw

The political scientist believes that the cantons are only considering using the instrument because they feel ignored on the political scene.

“There is a lot of tension between the cantons and the federal government at the moment;” Sciarini told swissinfo.

“The cantons feel they are being ignored when it comes to relations with Europe, and only have a limited time to express their feelings on government spending cuts. The fiscal package decision was the last straw.”

Sciarini says he is quite optimistic that the referendum will succeed and adds that it would create an interesting precedent in Swiss politics.

Long way to go

But there is still a long way to go before the referendum becomes a reality. Although 16 cantonal governments support the move, in most cantons their parliaments will have the final say.

The cantons have until October 9, 2003 to put forward their referendum. Political commentators say that failure would be a severe blow for the cantons and result in a loss of face.

With the federal elections taking place in autumn, it may be difficult to persuade parliamentarians, who mostly sit in the cantonal parliaments, to oppose the cuts because they also include breaks for families and house owners.

The political left is also sceptical about the referendum getting through. The Greens and left wing parties other than the Social Democrats have already decided to launch a conventional referendum that would need 50,000 voters’ signatures against the law to be collected within 100 days of publication of the decree.

swissinfo, Andrea Tognina (translation: Isobel Johnson)

Key facts

So far, five cantons have come out in favour of the cantonal referendum – Bern, St Gallen, Graubünden, Solothurn and Valais.
The cantons of Aargau, Zug and Neuchatel have already declared their opposition to the initiative.
In June, the Swiss parliament approved the 2001 tax cut package, which mainly benefited families, home-owners and stock market investors.
The cuts are worth SFr2 billion and the cantons stand to lose SFr500 million in revenue.
Families benefit from tax breaks worth SFr1.2 billion.
Cantons particularly object to cuts for property owners who, under the new system, would be given a bigger tax break.