Even though the federal government discontinued its coronavirus hotline at the beginning of September 2021 because of a lack of demand from companies, it cheerfully continues to pay out hardship assistance. We may have heard them joyfully announce the imminent exit from the crisis with the words “today is a good day” at the beginning of February 2022, but at the same time they’ve also extended, yet again, the legal basis for the cantonal hardship programs.
Given that the Federal Council has held out the prospect of a return to normality by the end of February at the latest, its decision to pay hardship assistance until mid-2022 makes no sense in terms of either financial or economic policy. The period for which short-time work compensation can be paid, originally intended to be a maximum of six months, has now been increased by a factor of 4 to 24 months.
The consequences for federal finances are enormous: in the first 33 days of the new year alone, assistance to the tune of more than CHF 7 billion in public money was approved. The government-sponsored coronavirus windfall is becoming a never-ending story. Despite the prospect of an imminent return to normality, all kinds of taxpayer-funded protective shields remain in place. Festival operators are already busy preparing for this summer’s major events, but at the same time another CHF 60 million in assistance is being made available this year to the event industry. The federal treasury is coughing up even more for culture and sport, with contributions running into the hundreds of millions.
How long should private-sector businesses remain on a government drip feed after the pandemic-related measures have ended? (Insung Yoon, Unsplash)
What gets ignored is the extensive control bureaucracy the payment of state benefits involves. This is something only the political left can rejoice about. For them, only the all-powerful state can bring about the recovery of business and society – which of course is economic nonsense. What it actually does is delay and limit the natural transformation of industries and the ongoing development of the Swiss business landscape.
In developed economies such as Switzerland, this landscape is highly dynamic, with actors coming and going all the time. Every year between 5 percent and 15 percent of companies go out of business, and at the same time many new enterprises are started. In recent years the corporate “death rate” has always been accompanied by an even higher “birth rate” with government assistance depressing the bankruptcy rate. What companies need is not a comprehensive welfare state that’s constantly bailing out businesses, but a rapid return to entrepreneurial independence.
