- The federal government is likely to end the next year with a minus of 6.7 billion francs. Expenditure is expected to increase twice as fast as revenue
- The Federal Council has thus presented a budget for 2024 that is just in line with the debt brake.
- In the following years, however, further savings measures are likely to be necessary due to the constant flow of new expenditure.
Finance Minister Karin Keller-Sutter presented the key figures for the 2024 estimate to the media in Bern. As previously announced, the federal government can only comply with the budget rules by requesting extraordinary expenditure – for example for refugees from Ukraine (1.2 billion francs), for the SBB (1.2 billion francs) and for the rescue package for the electricity industry (4 billion francs ). According to the Federal Council, however, the latter should not be used.
Despite this posting, the ordinary budget has a financing deficit of CHF 0.5 billion, as it was said. Accordingly, Parliament only has a scope of action of CHF 5 million to pass a budget that is compliant with the debt brake.
High uncertainties
The restructuring of the federal budget is “no walk in the park,” said Keller-Sutter. A “balanced budget” could only be achieved through previously communicated adjustment measures in the amount of 2 billion francs distributed across all departments. The small fiscal leeway shows how difficult the situation is.
“We have cleared a first hurdle,” said Keller-Sutter. The Federal Council will focus on being able to do more in the future instead of just cleaning up.
In the medium term, however, this goal is likely to be difficult to achieve. According to the Federal Council, the relief package that has been known for a long time from 2025 will not be enough to compensate for the structural deficits. “Further cleanup measures will probably be necessary,” says Keller-Sutter. The uncertainties in relation to the next few years are high.
Debt brake “not a whim of the finance minister”
The reason for the poor prospects with structural deficits running into the billions is the constantly increasing expenditure. From 2025, the federal government will probably have to spend substantially more money on childcare that supplements the family. If the Ukraine war continues, the expenditure in favor of the refugees could no longer be booked extraordinarily.
That is why the relief package is also starting with the heavily tied expenses. These are expenses that are enshrined in the constitution or in a law. Savings must also be made there in the future. That is “important and essential,” said Keller-Sutter.
Expenditure would still continue to rise despite the planned clean-up. “The aim is to be able to keep the federal budget in balance.” The debt brake enshrined in the constitution is an important instrument for this and “not a quirk of the finance minister”.
problem army expenses
Keller-Sutter again urged spending discipline. Ultimately, the budget authority lies with Parliament. There is also a need for a discussion about the division of tasks, i.e. about what share the cantons could make.
The Minister of Finance mentioned the increase in army spending desired by Parliament as the “greatest challenge” on the expenditure side. “At the moment we don’t know where we’re going to get the money for it.” It is important to shape the growth in such a way that it is digestible.