Increase in the army budget: After Ueli Maurer’s intervention, Viola Amherd argued that he would withdraw

Ask 100 to get 50: This is apparently the motto behind the proposed increase in the army’s budget. On Wednesday, the Council of States approved a proposal calling for a gradual increase in funds for national defense. By 2030 at the latest, at least 1 percent of economic output (GDP) should flow into the military. The National Council has already accepted exactly the same proposal; that’s the end of the matter. The Federal Council is obliged to implement the mandate.

If you take the text of the initiative at face value – and you really have to, since it is in the binding form of a motion – the demand appears extremely ambitious. According to current forecasts, 1 percent of GDP in 2030 corresponds to CHF 8.6 to 8.8 billion. Today the army budget is 5.3 billion. In order to achieve the target, Parliament would have to increase the funds by over 400 million francs each year. A number of bourgeois parliamentarians who supported the initiative indicate that they do not really believe in such a plan. Not everyone says so openly.

But “only” 7 billion?

One exception is Charles Juillard, member of the Central Council of States: He assumes that the army budget can only be increased to about 7 billion francs by the 2030s. Juillard may benefit from the fact that although he is a security politician, as the former finance director of his canton he also knows the practical constraints of a treasurer.

It sounds similar to his party colleague Peter Hegglin, another former finance director: the demand is “very extensive,” he said. In addition, there is a danger that Parliament will once again curtail its already shrinking scope for financial policy. Nevertheless, Hegglin voted for the initiative, as did all the other bourgeois councillors.

What is that supposed to mean? It is undoubtedly clear that Parliament wants to increase the army budget more than planned. However, it is unlikely that this expansion will go as far as the initiative calls for. Several security politicians are talking about increasing the funds by CHF 300 million a year, which will probably miss the 1 percent target.

Amherd changes her rhetoric

But this timetable also appears sporty. Such an expansion is only likely to be possible if Parliament simultaneously increases taxes or curbs spending growth in other areas. At least that’s the conclusion he draws financial plan of the Confederation: There would be space for the first 300 million tranche next year, but from 2024 there is no scope for further steps of this magnitude.

Nevertheless, Defense Minister Viola Amherd sent out completely different signals in May: an expansion of 300 million per year is possible “without the need for austerity programs and tax increases,” she said in the National Council debate. “No one has to suffer from the additional army spending.” That caused irritation in the finance department even then.

The corrigendum followed two weeks later: Finance Minister Ueli Maurer gave his colleague the Tamedia newspapers rudely contradicted. He made it clear that the planned increase currently has no place in the budget. For her part, Amherd did not go into this question in more detail on Thursday in the Council of States. She only said that the increase was possible without putting an “undue burden” on other areas.

“Correct” the expenses

Ueli Maurer, in turn, doubled down this week: He said in Parliament that the draft for the 2023 budget is being worked on, but that the requirements of the debt brake have not yet been met. According to Maurer, a little more than a billion is still missing to achieve this goal. He is working with the other departments to “correct” the expenses.

There isn’t much time left. The Federal Council presents the key values ​​of the budget before the summer holidays. It is considered certain that the army will receive more money than previously planned. But where will the funds come from, especially in the next few years? Security politicians argue that one must now step on the brakes in areas such as research or the welfare state, which have grown faster in the past. In addition, it is not about real savings, but only about reducing the increase in expenditure.

Less education, more army?

But a look at the financial plan shows that it won’t be that easy. In some areas, such as agriculture or transport, no growth in spending is planned at all. A very large increase can only be seen in social security. For the most part, however, this can be traced back to a social security system where cuts are hard to imagine: the AHV. Most of the increase is also “budget-neutral”: it consists of the planned increase in VAT, which is part of the AHV proposal that the people will vote on in September.

There remain areas such as education or development cooperation where growth could be slowed down. However, the increases here are not extremely large: by 2025, annual expenditure should “only” increase by CHF 480 or 230 million. This year, however, the army budget would have to be increased by 900 million compared to today if one really wants to increase it by 300 million a year.

This increase could not even be compensated for if development aid and education were “frozen”. Politically, this would be tricky anyway, since education in particular has an influential lobby. Rather, it demands more money because the prospects are mixed in view of the blockade in cooperation with the EU states.

The example is symptomatic: there are also strong interest groups fighting for higher spending in other areas. Even if you only look at those projects for which parliament has already made preliminary decisions, the list is impressive. The Health Commission of the National Council, for example, is planning a strong one Expansion of premium reductionsand the Education Commission wants Crèche vouchers to distribute.

At the same time, Parliament has initiated major tax reforms, which it is very questionable whether they have a chance. However, if they succeed, the losses are significant (see table). The OECD minimum tax for large companies could provide a little help. On the other hand, it is unclear how long the federal government will be able to outsource the high refugee costs to the extraordinary budget.

Conclusion: It will be tight. The distribution battle is intensifying. Thanks to the debt brake, Parliament will not be able to avoid setting priorities.