Political rite of spring: historically, voter turnout in Switzerland for national referendums averages around 50 per cent. But the proposals for May 16 on money matters have sparked controversy and could prompt more people to step up to the ballot box.
Igor Stravinsky once said that a good composer doesn't borrow, he steals. Some political pundits say that this old adage precisely describes the way the Swiss government is orchestrating its latest financial overture.
The political parties as well as the cantons have already chimed in, voicing with forte their opinions on the three proposals presented by the Federal Council on which the voters will ultimately decide:
* Change in the federal law governing the country's old-age and survivor's insurance (known as the AHVG), or the so-called 11th AHV revision;
* The federal government's resolution of October 3, 2003, calling for an increase in the value-added tax to help finance the AHV/IV; and
* The federal law of June 20, 2003 on revising the tax code in the areas of personal income tax on married couples and families, residential property tax and securities sales tax--the so-called tax package.
What's At Stake?
The primary objective of the 11th AHV Revision is to ensure the financial security of the federal pension ,scheme in the medium and long term.
The legal retirement ages for both men and women would be set at 65. The revision would also limit pension claims for widows, and equalise those for widowers.
The federal decree mandates boosting the value-added tax by 0.8 of a percentage point for helping to finance the state disability insurance (IV) and by one percentage point for funding the old-age and survivors' insurance (AHV). The tax reduction package would lead to direct federal and cantonal tax savings of roughly CHF 2.3 billion a year.
Broken down at the federal level, this means allocating about two-thirds to married couples and families in the form of more deductions and reduction of the number of persons subject to federal tax base, by 37 per cent.
Residential property owners would receive about one fifth of the total tax savings in the form of exemptions. And Switzerland's financial centre would get a sixth of the tax savings through cuts and revisions to stamp taxes levied on certain types of securities transactions.
Voters must decide on acceptance or rejection of the entire tax package, and not on any of the three aspects of the proposal.
The three referendum proposals have far-reaching implications for shaping the country's financial and economic policy landscape. It's been a long time since the citizenry has faced propositions portending such financial significance for the nation's pocket book.
Overall, the bottom line is...
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