- Notes from the Federal Palace
The 2017–2019 stabilisation programme and other federal government cost-cutting measures
The Federal Council adopted the 2017–2019 stabilisation programme in May 2016 and referred it to Parliament for deliberation. Parliament will decide on the 2017 budget and stabilisation programme in December. However, the government is already planning further cost-cutting measures.
A year ago we informed you about federal government’s savings measures which were introduced owing to the deficit in 2014: an adopted austerity package for 2016 with savings of around CHF 1 billion and a planned stabilisation programme for the period 2017–2019. The stabilisation programme has now been presented and passed to Parliament for a decision. Discussions have already taken place in the parliamentary committees responsible. Parliament will adopt the stabilisation programme together with the 2017 budget in the December session. Parliament can still make amendments to the stabilisation programme, but details of this were not known at the time when this issue went to print. The total figure is unlikely to change much.
2017–2019 stabilisation programme
The stabilisation programme adopted by the Federal Council provides for annual reductions to the federal budget of CHF 800 million to CHF 1 billion in the period 2017 to 2019. With 24 measures in total, all federal government’s areas of responsibility will contribute to budget cuts.
With a share of over a quarter in the package for 2019, development aid and foreign relations are severely affected. Distributed across the three years, the cuts in this area amount to CHF 613.5 million. Education and research as well as social welfare will also make a significant contribution to cutting costs with shares of 17.9 % and 17 % respectively in 2019. The savings measures affect federal government staff too. General salary increases and federal government’s financial contribution to early retirement are to be axed.
The 2017–2019 stabilisation programme does not provide for the closure of any representations. However, the FDFA will not be able to avoid introducing additional measures to increase efficiency in order to continue to provide services on the same scale and of the same high quality.
Further cost-saving measures
According to the Federal Council, the stabilisation programme measures will not be enough to adhere to the debt brake provisions. From 2018 – even with the implementation of the proposal – the prospect of a structural deficit of up to 1.5 billion is looming, as Finance Minister Ueli Maurer told the media. The reason for this is growing expenditure on asylum and additional outlay on retirement provision and expanding the motorways. And less revenue will come in. The corporate tax reform III adopted by Parliament in June 2016 will result in a shortfall of around CHF 1 billion a year.
The Federal Council therefore announced on 29 June 2016 – when it adopted the 2017 budget – that it would set out a further stabilisation programme for the period 2018–2020 in the autumn. It was unclear how this would look at the time when this issue went to print.