Cabinet plans spending cuts but still to give details
The government is seeking annual cuts in public spending to the tune of CHF1 billion ($1.1 billion) from 2017-2019 as a slump in revenue is expected to continue.
Finance Minister Eveline Widmer-Schlumpf said the cabinet agreed to targets, but she dismissed media speculation about specific financial cutbacks.
She refused to give detailed figures, saying it was up to the seven ministries to make proposals by September. The cabinet will then re-examine the package by the end of the year and present it to parliament for debate.
Critics said the finance ministry might try to impose cuts in defence and education and pensions.
2016 budget
In a related development, the government has agreed the 2016 budget, which foresees a deficit of CHF380 million mainly as a result of stagnating revenue from direct federal taxes.
Widmer-Schlumpf also highlighted the negative impact of the strong Swiss franc and negative inflation which have been slowing down economic growth.
The government plans annual spending of CH66.9 billion for 2016, down CHF4 billion from an earlier estimation. Revenue for 2016 is slated at CH66.6 billion, nearly CHF5 billion lower than initially foreseen.
In 2014, Switzerland recorded its first budget deficit in a decade – CHF124 million – following lower-than-expected tax revenues.
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