Public debt continues to rise
The Swiss government has reported another deficit for the last financial year, although the result was much better than expected.
The country’s debt climbed past SFr130 billion ($104 billion) after the authorities paid in advance for railway projects and pension funds.
The loss was only SFr121 million, instead of the SFr1.8 billion anticipated in the budget, due mainly to extra revenue and budget cuts.
Government revenue was actually over SFr500 million more than the budget planned. Withholding and road taxes in particular accounted for the increase, while stamp duty, direct taxation and the tobacco levy were well below expectations.
Total revenue – worth nearly SFr51.3 billion – was up 5.5 per cent over 2004. Economic growth was estimated to be 2.5 per cent last year.
Thrifty Swiss
Spending was down to SFr51.4 billion, lower than budgeted (SFr52.5 billion). It only increased 2.2 per cent over 2004.
The biggest increases came from the handing over of a greater share of taxes and road duty to the cantons. Spending on transport also rose five per cent, with more funding going to major rail projects.
The government saw its spending on foreign affairs rise more slowly – just 1.1 per cent. A larger contribution to peacekeeping operations and aid packages for the Asian tsunami victims accounted for the increase.
There was little in extra funding for education and research (0.6 per cent), while spending on the military actually fell by 1.4 per cent, as there were fewer weapons purchases.
Funding for farmers fell by over three per cent, reflecting the government’s new agricultural policy, which calls for lower market subsidies.
Spending on the environment and construction dropped substantially (down over 14 per cent), with fewer subsidies for wastewater treatment and less investment aid for mountain regions.
Civil service cuts
Public servants also made sacrifices to help balance the books. Spending on personnel was SFr172 million less than planned, down SFr88 million on the previous year. This was mostly due to internal reforms and wide-ranging job losses.
These moves have prompted widespread opposition, with around 2,500 civil servants taking to the streets in protest in December last year.
But the main reason public debt grew SFr3.7 billion to SFr130.3 billion at the end of 2005 was loans.
Money was ploughed into railway projects and was also used to plug holes in the government’s and the post office’s pension funds.
All in all, the state had to pay nearly SFr3.6 billion in interest last year, an increase of nearly 13 per cent.
Public federal debt is equivalent to 28.5 per cent of the Gross Domestic Product.
swissinfo with agencies
The country’s debt was SFr130 billion ($104 billion) at the end of 2005.
The loss was only SFr121 million instead of the SFr1.8 billion anticipated in the budget.
Government revenue was over SFr500 million more than the budget planned.
Total revenue was worth nearly SFr51.3 billion.
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