Switzerland’s debt brake will be put to the test in the coming years. The budget deficit has been growing by up to CHF 2 billion per year. The reason for this is not the state’s declining revenue, but an increase in expenditure, especially in the areas of social welfare, transport and education. Priority setting is urgently needed in this context. Avenir Suisse’s “shadow budget” lists 34 policy measures, which could generate a potential short-term relief of CHF 1.7 billion (2.6% of the total expenditure). In the long term – after the necessary legal adjustments – the 34 proposals could contribute tot o total reduction of CHF 9.4 billion, or 14% of the federal budget. Some examples include:
- Agricultural subsidies should be reduced to the EU level.
Saving: CHF 350 million in short-run. CHF 2.5 billion in long-run
- The federal government could partially withdraw its subsidies of individual health insurance premiums.
Saving: CHF 165 million in short-run. CHF 2.48 billion in long-run
- Early retirement premiums for military personnel and the border patrols need to be suspended.
Saving: CHF 10 million in short-run. CHF 20 in long-run
The savings by the Confederation would lead to more responsibilities for the cantons. The necessary disengagement of responsibilities between the Confederation and the cantons, which was set out in detail in the publication “NFA II“, will allow for a greater reduction in direct federal tax. In the long run, a reorganization of activates between the federal government and cantons will leave the responsibility of direct taxation to the cantons. This measure will facilitate the gradual shifting of tax revenues from the Confederation to the cantons.