Federal government draws largely positive conclusion on corona hardship aid
Published: Friday, Dec 22nd 2023, 13:30
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The federal government's hardship aid of around CHF 5.3 billion has saved up to 35,000 companies in the country from collapse during the coronavirus crisis. The federal government gave a largely positive assessment on Friday. However, the aid money was not used efficiently everywhere.
In an evaluation, the Swiss Federal Audit Office (SFAO) found that some of the hardship measures were too high or unnecessary in relation to demand. In addition, there had been unequal treatment between sectors and between companies within a sector.
By focusing on company turnover for compensation, companies with high turnover losses but low fixed costs were favored. The Financial Audit Office was critical of the easing of access for companies that were closed by order. This meant that companies that were hardly affected received aid, for example due to other sales channels such as online mail order and take-away.
For future aid, the SFAO suggested, among other things, the possibility of reclaims in cases of excessive aid. Furthermore, the objective of financial aid should be clearly formulated, the approval criteria should counteract excessive aid, and a rapid response from the public sector is of central importance. According to the audit, full coverage of uncovered costs is not necessary, as the cost-benefit ratio stagnates with increasing coverage.
Federal problems
Finally, the SFAO also saw a problem with federalism and suggested that principles for cost sharing between the Confederation and the cantons be developed in the future. The combination of highly federalized enforcement and a high proportion of federal funding is "unfavourable". There is a risk that the cantons will not use the financial resources efficiently if the majority of the burden is borne by the federal government.
All in all, the Federal Council believes that hardship assistance has proved its worth. It based its assessment on experience gained during implementation and on two evaluations. The first evaluation of the concept and effects was carried out by the Swiss Federal Audit Office, while the second evaluation of the implementation was carried out by Interface Politikstudien Forschung Beratung in collaboration with Ecoplan.
The majority of the 35,000 companies received support in the form of À-fonds-perdu contributions. Almost half of the aid went to the catering and hotel sector. Other relevant shares went to businesses in the wholesale and retail trade and in the travel industry.
Positive balance sheet
The survey conducted by the Swiss Federal Audit Office showed that this assistance provided important and efficient support and had a positive impact on most of the companies surveyed. The speed of response and flexibility of implementation on the part of the Confederation and the cantons in view of the constantly changing situation were decisive factors.
The hardship aid was intended to prevent bankruptcies and job losses at companies during the coronavirus crisis and the measures ordered by the authorities to protect the population from the coronavirus. In particular, high uncovered fixed costs were to be reimbursed by the state.
The hardship assistance came into force in December 2020 and was a supplement to existing assistance such as short-time work or coronavirus income compensation. The cantons were responsible for implementation. They decided whether to take measures on their territory and how to implement them.
Unprecedented crisis
The outbreak of coronavirus in Switzerland at the beginning of 2020 led to the biggest crisis in the country since the Second World War. The Federal Council temporarily declared a state of emergency.
In the fight against the virus and to prevent infection, the authorities resorted to drastic measures. The closure of stores, restaurants, museums, sports facilities and cultural institutions brought entire sectors of the economy to an almost complete standstill. At the same time, the federal government launched an unprecedented aid program: For economic aid alone, it has so far awarded or pledged a total of around 50 billion francs.
In Switzerland, over 14,000 people died in connection with a Covid-19 infection and thousands more fell ill, some of them seriously.
©Keystone/SDA
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