This week, Switzerland’s federal government announced it was cutting its savings targets slightly amid pressure from cantons and political opposition, reported RTS.
The Federal Council announced revised savings targets, lowering the total volume of planned cuts to CHF 3.1 billion by 2029—down from the CHF 3.6 billion outlined in January. The adjustments follow criticism from cantonal governments and political parties during the consultation process.
The core of the federal cost-cutting plan remains intact. But several provisions have been eased, particularly those affecting intergovernmental transfers. Changes include maintaining financial equalisation mechanisms and payments to cantons, which had sparked concern among cantonal governments.
To avoid complicating parallel efforts to stabilise Switzerland’s pension system, the government has also dropped—for now—its plan to separate the budgets of the federal administration and the AVS/AHV (state pension scheme). The move, however, reduces the expected savings by at least CHF 100 million.
Further concessions have been made in response to political backlash. Proposals to alter the tax treatment of lump-sum withdrawals from occupational and private pension plans (the second and third pillars) have been shelved after strong opposition, including from centre and right-leaning parties. The Federal Council has also opted to maintain existing subsidies for regional and local media, for the time being.
After accounting for these revisions, the government now expects savings of around CHF 2.4 billion in 2027, rising to just under CHF 3 billion from 2028 onwards. The programme remains a substantial effort at fiscal consolidation—but one softened by the realities and tensions of Swiss federal politics.
More on this:
RTS article (in French) – Take a 5 minute French test now
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