• Politics

The big clear-out before the elections

17.03.2015 – Jürg Müller

The electorate will be voting on four completely different issues on 14 June 2015: inheritance tax, artificial insemination, radio and TV licence fees and grants.

A direct democracy clear-out is on the cards in the run-up to the federal elections this autumn. The last referendum of the year at federal level will probably take place as early as 14 June. Referendums will not be held on the other usual dates in September and November (except in an emergency) as the political establishment does not want its hands too full in the run-up to the parliamentary elections on 18 October. It will therefore be a packed June. Four proposals on a wide range of issues will be put to voters in one go. Two popular initiatives with very different emotional resonances are up for debate: one calls for a national inheritance tax, the other would harmonise grants. Also on the agenda is the ethically fraught issue of pre-implantation diagnostics. And a shake-up of the broadcasting licensing system is being sought through a partial revision of the Radio and TV Act. 

Million-franc inheritances to contribute to the social insurance fund

Recent years have increasingly seen popular initiatives where social justice and redistribution play a centre role. These include the “fat cat” initiative, the minimum wage and the 1:12 initiative, and the initiative to abolish flat-rate taxation. The “Tax million-franc inheritances for our old-age and survivors’ insurance (AHV) - (inheritance tax reform)” initiative is in the same vein. The proposal from left-leaning/Green parties and the Evangelical People’s Party would put inheritance and gift tax on a federal footing. Two thirds of the income generated from the new tax would flow to the AHV, with the other third going to the cantons. However, the cantons would lose the power to raise this tax themselves. Almost all cantons have an inheritance tax, but direct descendants are exempt almost everywhere. This would no longer apply under the new rules; only spouses would be exempted from the tax. Estates would be taxed at 20?%, with CHF 2 million being tax-free. 

The proponents say there is no fairer tax than inheritance tax as estates are assets the heir has not created. SP president Christian Levrat also points out that wealth is becoming increasingly concentrated. One percent of the population in Switzerland now owns 59?% of the assets. Opponents counter with the argument that the initiative erodes the cantons’ financial and tax sovereignty and harms the economy as it renders succession planning in companies either difficult or impossible. Furthermore, income would be taxed three times over by income tax, wealth tax and inheritance tax. Andrea Caroni, an FDP National Council member from Appenzell, calls it a “fiscal class war”. But his SP Council of States colleague Susanne Leutenegger Oberholzer talks of the “trend towards the feudalisation” of our society. 

Radio and TV: everyone must pay

Nowadays, anyone wanting to listen to radio or watch TV can do so without a traditional radio or TV set. Broadcasts can be received on a PC, smartphone or tablet. As a result of this technological change the current system will be shaken up through a partial revision of the Radio and TV Act. Replacing the current reception licence for set owners, all households will have to pay a general levy. Companies with a turnover of CHF 500,000 or more will also have to pay up. 

This will cut red tape and reduce fees. It will also mean an end to licence dodging and costly checks. As the levy will be spread across more households and companies, the current fee of CHF 462 per household will fall to around CHF 400. A major chunk of the reception fees of around CHF 1.3 billion per year will go to the Swiss radio and TV broadcasting corporation (SRG). But the reform could also benefit private stations, which should get extra: 4–6% of the total.

In Parliament the bill triggered a broad debate on the media. One of the main critics of the SRG and public reception fees is Zurich SVP National Council member Nathalie Rickli. On her homepage she writes: “We are therefore dealing with an arbitrary tax. You will be taxed even if you don’t have a set.” She goes on: “The internet and multimedia age has given us diversity in the media like never before. There are hundreds of TV and radio stations, internet pages and social media on offer. This should have been the time to question the need for a public offering in the media. There are so many private providers that it is no longer necessary for the SRG to operate 18 different radio stations, seven TV channels as well as a host of websites.”

Rickli therefore supported the Swiss Trade Association when it decided to call for the referendum. For the association’s director Hans-Ulrich Bigler the reform is a “compulsory levy” that will cost the economy an extra CHF 200 million.

An ethically fraught proposal

Interior minister Alain Berset has been candid in saying the debate surrounding the popular initiative on pre-implantation diagnostics (PID) will “not be easy”. His concern is that Parliament has significantly expanded the bill that the Federal Council originally presented. In essence, couples who are genetically predisposed to having children at risk of a severe hereditary disease will be able to use PID. In practice this means that, when undergoing artificial insemination, they can have the embryos screened for this disease to ensure only embryos unaffected by the disorder can be used for reproduction. However, it will still be prohibited to screen embryos for conditions that spontaneously arise, such as Down’s syndrome.

Parliament wants to go much further now and allow chromosome screening for all couples undergoing artificial insemination. The original bill would have allowed a few dozen cases per year. If the parliamentary version becomes law, however, that figure would be several thousands. Opposition has thus increased significantly. The bill must in any case clear two hurdles. On 14 June, the electorate will vote on a constitutional amendment that would in principle allow embryo testing. This enjoyed broad support in Parliament. Only later on will a vote be held on the highly controversial law codifying the exact application. If voters give the green light to a constitutional amendment on 14 June, the period for submitting a referendum will begin. A referendum is very likely: the Evangelical People’s Party (EVP) has indicated its intention to call one. 

Harmonisation of grants

Anyone needing a grant for attending a higher technical college, university of applied sciences, technical university or another university should have the same opportunities. Currently that depends on the canton, a state of affairs the Swiss association of students (VSS) claims is “unfair”. So it is promoting an initiative to harmonise the awarding of grants for tertiary education and therefore shift legal powers from cantonal to federal level. Grants must also guarantee a minimum standard of living during a recognised initial tertiary education. The VSS believes having clear rules on grants will help alleviate the skills shortage.

The Federal Council and Parliament have rejected the initiative, but support its focus. To ease some of the pressure, the Education Grant Act has been fully revised through an indirect counterproposal. This draft has already been passed by Parliament, but has not been put to the vote. The change in the law will not affect the existing powers of the federal government and cantons, but the federal government will support the cantons in harmonising the grants system. Specifically, cantons will only receive a federal contribution if they sign up to the grants agreement. As requested by the VSS, the agreement sets nationwide principles and minimum standards.