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Federal budget gets stamp of approval

Finance Minister Hans-Rudolf Merz follows the debate in the Senate

(Keystone)

Parliament has agreed next year's budget which foresees a surplus of SFr904 million ($752 million).

The Senate on Tuesday followed the House of Representatives, bringing to an end the negotiations on what is normally a controversial issue.

The 2007 budget is based on SFr56 billion in revenue and SFr55.1 billion in expenditure and differs only slightly from the government's proposed surplus of SFr918 million.

Both houses of parliament approved extra spending for cultural projects but agreed to additional cuts in expenditure for external consultants, following a critical report.

The Senate passed the budget unanimously and without much discussion on Tuesday. But the House of Representatives had spent nearly all of last week on the debate.

Federal funding is one of the most important issues during the winter parliamentary session

Several senators expressed concern over the national debt and extra spending for public transport and health envisaged in the financial plan for 2008-2010.

Debate

The Centre-right warned that an increase in expenditure must not cancel out economic growth. The centre-left Social Democrats for their part said spending cuts did not go together with tax breaks for the wealthy.

Finance Minister Hans-Rudolf Merz countered that it had become more and more difficult to introduce changes to the system.

"What can you do if everyone simply wants to look after his or her own interests?" he said.

Merz reiterated the need for fiscal reforms for families and businesses.

The financial plan foresees a combined surplus of SFr3.9 billion over a three-year period. The government has pencilled in an increase in spending of 4.5 per cent as well as a five per cent hike in revenues.

swissinfo with agencies

Key facts

Federal accounts (in billion SFr):
2006: revenue: SFr 56 expenditure SFr55.1 surplus SFr0.9
2005: revenue SFr51.28 expenditure SFr51.4 deficit SFr0.12
2004: revenue SFr48.63 expenditure SFr50.29 deficit SFr1.66
2003: revenue SFr47.16 expenditure SFr49.96 deficit SFr2.8
2002: revenue SFr47.41 expenditure SFr50.72 deficit SFr3.32

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In brief

The 2007 budget – with its almost SFr1 billion surplus - is one step on the way to the government's aim of shaking up the country's finances.

It is planned to save around SFr8 billion each year until 2015.

The combined deficit of Switzerland's federal, cantonal and local governments was SFr239 billion at the end of 2004, which amounts to 53.5% of Switzerland's Gross Domestic Product.

Switzerland spends SFr7 billion a year – or 7% of its total tax income - on debt servicing.

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