NextFin news, On Friday, September 19, 2025, the Swiss Federal Council formally approved a budget austerity plan that mandates CHF 2.4 billion in spending cuts for the year 2027, with additional reductions of CHF 3 billion planned for 2028 and CHF 3.1 billion for 2029. The announcement was made in Bern, Switzerland's capital, as the government seeks to address growing structural deficits and rising public debt.
The Council's decision follows consultations and a reassessment of earlier proposals, scaling back initial cuts from CHF 2.7 billion to CHF 2.4 billion for 2027. The savings will be achieved through nearly 60 measures, including a CHF 300 million reduction in federal operating costs by 2028, with CHF 190 million targeted from staff expenses. At least CHF 100 million of these savings will come from changes to employment conditions.
More than half of the proposed measures require amendments to existing laws, which the government plans to consolidate into a single reform bill for parliamentary approval. Measures not requiring legislative changes will be submitted during the regular budget process.
The Federal Council warned that if parliament rejects or dilutes the austerity plan, deeper and earlier cuts will be necessary. These would primarily affect education, research, development aid, agriculture, and defense sectors, potentially requiring reductions of up to 10% in these areas. The government emphasized that without these budgetary adjustments, Switzerland would face increased borrowing to finance its expenditures.
Switzerland's public finances have been under strain, with spending outpacing revenues for years. Revenues are forecasted to reach CHF 98 billion by 2029, but structural deficits exceeding CHF 2 billion are expected to re-emerge in 2027 and widen to over CHF 4 billion by 2029. At the end of 2024, the federal government debt stood at CHF 141 billion, approximately 17% of GDP, with total public debt including cantonal and municipal obligations reaching around 37% of GDP.
The austerity plan has triggered a wave of reactions from political parties and cantonal authorities, many of whom oppose the cuts due to concerns over their impact on public services and social programs. The Council of States is scheduled to debate the plan during the upcoming winter session, followed by the National Council in the spring of 2026.
Source: Le News, RTS (https://lenews.ch/2025/09/19/swiss-government-sets-out-ambitious-spending-cuts/)
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