Switzerland's 2025 Budget: Winners and Losers Identified
After three weeks of intense debate, the two chambers of the Swiss parliament - the National Council and the Council of States - have finally agreed on the budget for the year 2025. Here's a lowdown on the main winners and losers.
Let's start with the dragons to slay first, so we can end on a high note.
Childcare and youth activities
The federal government will be slashing 800 million francs yearly by no longer providing financial support to daycare centers, an essential service for working parents. However, this doesn't mean that there will be no funding for childcare facilities at all; the Federal Council believes that these subsidies "fall within the responsibilities of the cantons." Furthermore, subsidies for extracurricular activities for children and young people will be reduced.
Retirement funds
Currently, you are allowed, under certain conditions, to withdraw money from your obligatory second and optional third-pillar pension before retirement, incurring no tax penalties for early withdrawal. But the new measures will increase the tax on withdrawals from these two pillars by a grand total of 220 million francs by the year 2030.
Train travel
The government will no longer offer financial incentives for cross-border train passenger transport. No further details are out as of now, but the savings from this change will amount to 60 million francs by the year 2030. Additionally, the development of the night train network will be cut by 20 million francs.
Roads
The Federal Council plans to decrease the amount of money it contributes to the maintenance, repair, and expansion of the road infrastructure by 92 million francs. Projects which are not yet under construction would require a constitutional amendment and a mandatory referendum before they can be implemented.
Asylum seekers and refugees
The State Secretariat for Migration (SEM) will feel the budget pinch too. It will receive 100 million francs less for social assistance for asylum seekers and refugees, and also 85 million less for federal asylum centers.
International cooperation
The National Council wanted to cut 250 million for bilateral cooperation, economic aid, and contributions to international organisations, while the Council of States aimed at a 30-million cut. In the end, the two chambers struck a compromise and agreed to reduce the budget by 110 million francs.
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What about the heroes?
The military
Switzerland's military is the biggest winner in this budget - it will receive a whopping 29.8 billion francs for the years 2025-2028. The pressure to increase the army's budget has intensified in the past two years due to risky geopolitical conditions caused by Russia's invasion of Ukraine.
Polytechnic institutes and universities
Despite originally planning to cut the funding of polytechnic institutes (ETH in Zurich and EPFL in Lausanne) by 100 million, they ended up receiving a 12.5-million 'reprieve.' Other public universities will be 6 million francs richer in 2025.
Farmers
The year 2025 budget includes 42 million francs for the agricultural sector. On top of that, farmers will also be entitled to an additional 10 million to vaccinate their livestock against bluetongue disease, which has been detected in Switzerland in recent months.
While these are the main winners and losers in the budget for 2025, keep in mind that the impact of global economic trends will also play a significant role in shaping Switzerland's economic landscape. Governments spending, trade tensions and agreements, and interest rates can all create winners and losers depending on the sectors involved.
Without specifics about the Swiss budget for 2025, these are general observations based on broader economic trends. The actual impact on Switzerland would depend on how these global dynamics interact with local economic policies and conditions. Stick around for more updates as we deep dive into the economic challenges faced by Switzerland in 2025.
- The budget for 2025 in Switzerland's politics has significant implications for various sectors, as seen in the increased budget for the military by 29.8 billion francs, while it decreases for childcare and youth activities by 800 million francs yearly.
- Additionally, finance and business sectors may be affected by the reduced subsidies for extracurricular activities for children and young people, and the increased tax on withdrawals from retirement funds by a total of 220 million francs by 2030. In the realm of international cooperation, bilateral cooperation, economic aid, and contributions to international organizations will receive a combined reduction of 110 million francs.
