Federal finances are back in balance for 2023, the Federal Council announced on Wednesday. A slight surplus of 300,000 francs is looming for next year. However, this balance is only due to an accounting “trick”, launched the great financier Ueli Maurer in front of the media.
Expenses for Ukrainian refugees, estimated at 1.7 billion francs, are accounted for in the extraordinary budget. This may no longer be the case in the future. “In reality, we are in the red and the years ahead are bleak.” Corrections will be necessary.
Revenue increase
Expenses related to the fight against the coronavirus largely disappear. And revenues are increasing. They should amount to 81.3 billion. VAT and direct federal tax mainly contribute to this increase. They will each bring in an additional 800,000 francs. Non-tax revenue will also increase by half a billion. Corporate income tax revenue is expected to increase by 6%, the government says.
In addition, the Swiss National Bank should pay an additional distribution of 1.3 billion. About $200 million is expected to flow into federal coffers through a dividend from the sale of Ruag International.
War in Ukraine
The Federal Council plans spending of 82.2 billion. Some 2.1 billion are to be attributed to the war in Ukraine. Expenditure on social welfare increased by 11.1%. This increase is mainly due to expenses related to hosting Ukrainians.
The Federal Council has also planned spending of 325 million francs to finance researchers who wish to participate in Horizon Europe research projects. This budget will finance transitional measures until full association of Switzerland with the research program.
Unlike in previous years, expenditure related to Covid-19 is once again charged to the ordinary budget. The 2023 budget provides 180 million for screening tests, i.e. 1.4 billion less than in 2022 and 230 million for vaccines (-320 million compared to 2020). The support for culture and sport not being renewed, the Confederation will save 230 million.
Sanitation in sight
The financing account therefore records a deficit of 900 million francs for 2023. The situation is deteriorating for the years 2024 to 2026, already warns the government. The requirements of the debt brake will not be met and corrective measures of around 1.1 to 1.3 billion are to be expected.
Additional charges related to the counter-proposal to the premium reduction initiative, individual taxation, the abolition of rental value or the prolongation of the war in Ukraine could further dampen the outlook. Parliament has also decided to increase the army budget to 1% of GDP by 2030. This represents an increase from 5.3 to 9.3 billion, according to the Federal Councilor in charge of Finance. Parliament was counting on 7 billion, but that is without counting the evolution of the GDP.
All these expenditures cannot currently be financed under the debt brake. In the worst case, the deficit could rise to 7 billion in 2026, reminded Ueli Maurer. And this worst-case scenario is not unrealistic, said Sabine D’Amelio-Favez, director of the federal finance administration.
The Federal Council therefore wants to tackle the issue of fiscal consolidation as early as the second half of the year. The 2024 budget must meet the requirements of the debt brake. “We will have to make an effort in the coming years to regain control of the finances,” said the minister. And remember that no one wants to pay more taxes.
ats/ther