Winner and Loser Analysis of Switzerland's 2025 Financial Plan
Revised Base Article:
After over three weeks of heated debates, Switzerland's parliament, composed of the National Council and the Council of States, has finally agreed on the nation's 2025 budget. Here's a rundown of the major winners and losers.
Let's tackle the losers first to save the best for last.
Parents and Kids:
The federal government plans to cut 800 million francs per year by ceasing financial support to daycare centers - a vital service for working parents. It's worth noting that this doesn't mean the end of funding for childcare facilities; the Federal Council merely considers these subsidies to be the responsibility of the cantons. Moreover, subsidies for children's extracurricular activities are also expected to decrease.
Retirees:
Currently, individuals can withdraw money from their second and third-pillar pension under specific conditions, such as purchasing a home, without tax consequences. However, the government intends to save 220 million francs by 2030 by imposing higher taxes on such withdrawals.
Travelers:
Fiscal incentives for cross-border train travel are set to disappear, with expected savings amounting to 60 million francs by 2030. Additionally, the development of the night train network will be reduced by 20 million francs.
Road Users:
The Federal Council plans to slash the funding for road maintenance, repairs, and expansion by 92 million francs. Projects that have not yet begun construction may require a constitutional amendment followed by a mandatory referendum before implementation.
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Asylum Seekers and Refugees:
The State Secretariat for Migration will be hit hard, receiving 100 million francs less for asylum seekers' social assistance and 85 million francs less for federal asylum centers.
International Cooperation:
Bilateral cooperation, economic aid, and contributions to international organizations will be reduced by 110 million francs, a compromise between the two chambers of parliament.
READ ALSO: Swiss government announces significant budget cuts
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Winners:
The Military:
Switzerland's military, which has never engaged in a battle, stands as the biggest overall winner with a budget of 29.8 billion francs for the years 2025-2028. The pressure to increase the army's budget has escalated in the last two years due to Russia's invasion of Ukraine, leading to unstable geopolitical conditions.
Polytechnic Institutes and Universities:
Despite initially planning to cut funding to polytechnic institutes (ETH Zurich and EPFL Lausanne) by 100 million francs, these institutions managed to secure a 12.5-million reprieve. Other public universities will see a 6-million-franc increase in funding for 2025.
Farmers:
The agricultural sector will benefit from a 42-million franc allocation in the 2025 budget, and farmers will receive an additional 10 million francs to vaccinate their livestock against bluetongue disease.
READ ALSO: What are the major challenges facing Switzerland in 2025?
Sources: 1, 2, 3, 4, 5
(1) Swiss Business Federation (2) Swiss Confederation (3) Swiss Federal Office for Buildings and Logistics (4) Swiss Federal Statistical Office (5) swissuniversities)
- In the agreed 2025 Swiss budget, the federal government plans to save 800 million francs annually by reducing financial support for childcare centers, shifting the responsibility to the cantons.
- The finance ministry aims to save 220 million francs by 2030 by imposing higher taxes on withdrawals from second and third-pillar pensions, which could affect the savings of retirees.
- The Federal Council plans to cut savings from travel subsidies, expected to amount to 60 million francs by 2030, and reduce the development of the night train network by 20 million francs.
- Politics and general news outlets reported significant budget cuts, including a reduction of 100 million francs for asylum seekers' social assistance and federal asylum centers, and a decrease of 110 million francs for international cooperation.
