Council of States cuts the debt brake when discussing the budget
Published: Tuesday, Dec 5th 2023, 14:20
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The federal parliament is facing a tough struggle over the budget for the coming year. On Tuesday, the Council of States decided to spend significantly more on agriculture and public transport than requested by the Federal Council. As a result, the budget in its current form is only compliant with the debt brake thanks to a trick.
In the overall vote, the small chamber adopted the corresponding federal decree with a clear majority. However, this was preceded by a fundamental discussion on the meaning and purpose of the debt brake.
This was because the small chamber decided on a credit freeze after the increase in expenditure - i.e. an instruction to the Federal Council not to utilize the approved credits.
The freeze applies in the event that parliament does not find a solution that is compatible with the debt brake during further deliberations on the budget. This is the only way to comply with the constitutional requirements, argued the proponents.
SP Council of States sees corset too tight
The real problem, however, is the debt brake itself, criticized Carlo Sommaruga, member of the SP Council of States in Geneva. It imposes a corset on financial policy in situations where there is a clear need for federal funds.
Johanna Gapany (FDP/FR), President of the Finance Committee of the Council of States (FK-S), disagreed, saying that Switzerland only had the necessary funds during the pandemic thanks to the debt brake. It was the wrong time for tax increases, as the population was already burdened by inflation.
"Hope dies last," commented Finance Minister Karin Keller-Sutter. De facto, the credit freeze means a linear cut across the entire federal administration. At the same time, Keller-Sutter contradicted Sommaruga: the debt brake has proven its worth. In the past, the necessary investments were also possible with the debt brake, for example in rail infrastructure and research.
"Direct payments are income"
The Council of States approved the largest increases in expenditure compared to the Federal Council's proposal in the areas of agriculture and regional passenger transport. Specifically, the small chamber wants to provide the same amount of funding for direct payments as in 2023 - around CHF 2.8 billion and CHF 54.8 million more than requested by the federal government.
"Direct payments are actually income," Jakob Stark (SVP/TG) pointed out. Agricultural incomes are already comparatively low today. In addition, production costs for farmers were rising due to inflation. Unlike other points in the budget, this was a genuine cut, not a brake on the growth of expenditure.
The Council of States also allocated more money for other measures in the area of agriculture - including the promotion of sales of Swiss wine, herd protection and the promotion of sugar beet production. In total, the additional expenditure excluding direct payments amounts to CHF 17.2 million.
"Across the country with a lawnmower"
In addition, the small chamber increased funding for regional passenger transport by CHF 55 million compared to the Federal Council's proposal. Mathias Zopfi (Greens/GL) said that there was a risk of a reduction in services in rural, structurally weak regions. This is because the assumption of uncovered costs by the federal government is crucial there. "Here we are going over the countryside with a lawnmower and mowing down things that we need for the development of these regions."
Benedikt Würth (center/SG) urged in vain that the transport companies must produce the ordered offer with the existing means. This demand was "absolutely legitimate".
Savings mandate in the asylum sector
The compensatory measures adopted by the Council of States do not outweigh the additional expenditure on agriculture and public transport. In particular, the small chamber wants to spend CHF 30 million less than the Federal Council on social assistance for asylum seekers, temporarily admitted persons and refugees. It also wants to apply the cross-sectional cut of two percent decided by the Federal Council to the Federal Assembly, the Federal Supreme Court and the Federal Administrative Court. This means savings totaling CHF 5.1 million.
Army budget to grow faster
The financial outlook up to 2027 was also a topic of debate. The Federal Council expects structural deficits of two to three billion francs per year between 2025 and 2027 without cuts. According to its statement, this will be affected in particular by expenditure on refugees from Ukraine, premium reductions and the AHV as well as the growth in military expenditure against the backdrop of the war in Ukraine.
In this context, the Council of States wants to increase the army's budget faster than the Federal Council. Switzerland is to spend one percent of its gross domestic product (GDP) on national defense as early as 2030 and not just in 2035. During the budget debate, it approved a minority motion to this effect. The small chamber did not decide on Tuesday how the additional expenditure should be financed.
The matter goes to the National Council, which will debate the budget from Thursday.
©Keystone/SDA
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