Future generations face heavy financial burden

Switzerland's shrinking workforce will have to meet the needs of a growing elderly population Keystone

Future generations will have to pay a heavy price for the standard of living currently enjoyed by Swiss men and women, according to the first intergenerational study ever carried out in Switzerland.

The study, commissioned by the State Secretariat for Economic Affairs (Seco), found that future generations would face the legacy of a large national debt, unless measures are taken to address the current situation.

According to the report, people born after 1997 will have to pay around SFr66,000 ($36,700) more in taxes during their lifetime than those born in the base year of 1997.

In addition to a high national debt – SFr180 billion in 1997 – future generations of Swiss also face the problem of supporting an ageing population.

Presenting the report on Friday, David Syz of Seco said that Switzerland, in common with the rest of Western Europe, would have increasing numbers of pensioners relying on a shrinking work force for their means of subsistence.

He said it was time to give serious thought to whether current financial and social policies would place too heavy a burden on future wage earners. Syz said today’s voters had to bear in mind that they were taking decisions that would affect people currently too young to vote.

The report’s author, Bernd Raffelhüschen of the University of Freiburg in Germany, presented three possible ways of dealing with the problem of a high national debt and an ageing population.

He said future generations could be taxed by an additional 11 per cent, current tax rates could be increased by four per cent, or social expenditure could be cut back by the same percentage.

Intergenerational studies have also been carried out in most European Union countries.

swissinfo with agencies