Just nine months after they were first announced, the proposed austerity measures made by the Swiss government have now been watered down. Though the changes will see the federal government spend 900 million francs more over two years, lawmakers warn that further cost-cutting will be necessary to balance the books.
Our story starts in September 2024, when the Federal Council announced a wide range of austerity measures designed to balance the federal budget from 2027. Of the original 70 austerity measures originally proposed by experts, Switzerland’s executive decided to move forward with 60 of the proposals.
These included completely scrapping federal funding for childcare services, reforms and higher taxes on pensions, cuts to night train services and university funding, among many others. At the time, Finance Minister Karin Keller-Sutter (FDP) warned that amid increased spending on the military and first pillar pensions, the federal government would face deficits of over 4,5 billion francs a year by 2029 if it chose to do nothing.
Though the plans would have led to a balanced federal budget in 2027 and 2028, they received massive backlash from lawmakers, Swiss cantons and businesses. Faced with this criticism, on June 25, 2025, Keller-Sutter announced that the Federal Council would be changing its austerity package.
Under the new plans, federal budgets will be cut by 2,4 billion francs for 2027 and by 3 billion francs from 2028 onwards, down from 2,7 and 3,6 billion francs a year respectively. The major changes to the cuts are:
Interestingly, childcare, most transport, and climate change-related cuts will remain in place.
At the conference on June 25, Keller-Sutter argued that parliament “must face reality” when it comes to how their spending plans are imbalancing the federal budget. She predicted that even if the measures are enacted as they are, Switzerland will go from a small budget surplus in 2026 to at best a billion-franc deficit by 2029, and at worst a deficit by 2027.
She also warned parliament that current plans being debated in the halls of power, most notably the plan to introduce universal individual taxation, will likely mean major funding cuts elsewhere. For now, the austerity measures will be sent to the Council of States and the National Council for approval.
Despite the changes, this new plan has not gone down well with opponents, with the Green Party telling Watson that it still amounts to an ideologically-fuelled austerity programme. "Karin Keller-Sutter and the no-future Federal Council continue to want to take the climate to task," party president Lisa Mazzone said, adding that planned education and public transport cuts will lead to a ballooning cost-of-living.
A referendum against the measures also seems likely, with the Greens confirming that they “will, if necessary, defeat the Federal Council's backwards-looking austerity package at the ballot box".