Government foresees small budget surplus for next year

Finance minister Kaspar Villiger is not getting to excited about next year's projected budget surplus Keystone

The government has approved next year's budget, which foresees a small surplus, but the prospects for 2003 and 2004 look less promising. The Finance Ministry warned of an increase in spending and rejected calls for tax cuts.

The cabinet on Wednesday approved the 2002 budget, which envisages a surplus of SFr350 million ($210 million). Expenditure is expected to rise by 3.5 per cent to SFr50.6 billion, while revenue is set to reach SFr51 billion.

Parliament is set to debate state finances, including the budget, during its regular winter session.

The 2002 budget compares with an unexpected surplus in the federal accounts of SFr4.5 billion for the year 2000 and a planned surplus of at least SFr18 million for the current year.

Better than expected

The finance minister, Kaspar Villiger, said this year’s planned surplus was likely to be higher than expected, but he gave no details. He said favourable conditions on the stock market, notably for Swisscom shares, and the repayment of loans had contributed to the promising result.

For the years 2003 and 2004, however, the cabinet envisages deficits of SFr600 million and SFr400 million respectively, because of proposed cuts in Value Added Tax and an increase in spending on education, transport and development aid.

For 2005, however, the state finances are expected to be out of the red. The government expects a surplus of SFr800 million.

Speaking at a news conference in Bern, Villiger also warned of increased spending and called for a further reduction in federal debts, which currently stand at over SFr110 billion ($66 billion).

swissinfo with agencies