Villiger says economic growth won’t allow for tax reductions

Swiss Economics Minister Kaspar Villiger Wednesday rejected suggestions that the government should implement tax cuts in order to create a major boost for the Swiss economy.

Swiss Economics Minister Kaspar Villiger Wednesday rejected suggestions that the government should implement tax cuts in order to create a major boost for the Swiss economy.

Villiger — who effectively rejected policy suggestions by the Swiss People’s Party, which made major gains in weekend parliamentary elections – said the government had no financial reserves that would allow for tax reductions.

“There is no financial padding anywhere to fall back on,” the finance minister told parliament in the capital Berne.

He said that the Swiss economy was clearly on the upswing. But he added that tax cuts, should they really be implemented, would hardly provide the kind of economic boost necessary to compensate for tax shortfalls caused by the tax reductions in the first place.

The government’s main policy would be to balance the budget as soon as possible – possibly by 2001 – and to keep Switzerland’s taxation levels among the lowest of all member states of the 29 Organisation for Economic Cooperation and Development nations, Villiger said.

He pointed out that tax cuts were also out of the question since the government would have to increase spending on education, social security and welfare programmes and build up reserve funds to pay for membership should Switzerland ever decide to join the European Union.

From staff and wire reports.