The debt brake

09.12.2019 - The debt brake ensures that expenditure and receipts are balanced over the longer term in the federal budget. The federal budget has consistently achieved structural surpluses since 2006.

The debt brake enjoys strong support among the population: 85% of voters approved the constitutional provision on the debt brake in 2001, and approval remains very high according to surveys. With a debt ratio of less than 30%, Switzerland remains in excellent shape by international standards. The debt brake has not only helped Switzerland to withstand the financial and economic crisis relatively well; it has also allowed for a considerable reduction in federal debt.

Nevertheless, the mechanism is occasionally criticised too: among other things, it has led to the federal financial statements always being significantly better than anticipated in the budget. Although the debt brake is undisputed in principle, its design and implementation are thus nevertheless a recurrent topic of discussion. In this context, the Federal Council examined whether the structural surpluses which currently flow automatically into debt reduction should also be used in the future to compensate for losses in the case of tax reforms or to finance higher expenditure. Acting on the basis of various reports, the Federal Council spoke out against adjusting the debt brake at its meeting on 22 May 2019. The Confederation can sufficiently cover its current expenditure, investments and growth in priority task areas with existing tax revenues.

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