Bern, 20.05.2020 – At its meeting of May 20, 2020, the Federal Council adopted, by means of a special message, the IIa supplement to the 2020 budget. It requests the Parliament to open 11 additional appropriations for an amount total of 14.9 billion francs. Most of this amount (14.2 billion) is intended for the payment of a new extraordinary contribution from the Confederation to unemployment insurance (AC).
To date, the Federal Council has adopted various measures to combat the coronavirus pandemic. These are financed by additional credits (16.0 billion in 2020) as well as commitment appropriations intended for suretyships and guarantees (41.9 billion). The Parliament debated these appropriations during the examination of the first supplement to the 2020 budget during its extraordinary session and adopted them on May 6, 2020.
In the meantime, it has become evident that additional measures are needed in various areas. The Federal Council adopted this Supplement IIa at its meeting on May 20, 2020 and is submitting 11 additional appropriations for the amount of 14.9 billion to Parliament for approval.
Significant charges related to compensation in the event of reduced working hours
Of this amount of 14.9 billion, the major part (14.2 billion) relates to a new extraordinary contribution from the Confederation to the AC. This additional credit is required to prevent the AC fund from reaching its debt ceiling of $ 8 billion, which would result in higher employee contributions and a revision of the UI law. Taking into account the 6 billion adopted by way of the first supplement, the extraordinary contributions of the Confederation to the AC amount to 20.2 billion. The high burden on UI is mainly due to the (extended) partial unemployment benefit intended to prevent waves of layoffs and layoffs.
Significant additional appropriations also concern development aid (307.5 million). This amount will allow Switzerland to participate in various international efforts aimed at mitigating the consequences of the coronavirus pandemic. Other measures are planned in favor of sports (225 million). These are, on the one hand, contributions to lost funds to associations and other sports organizations (50 million) and, on the other hand, repayable loans to be granted in 2020 to the football and ice hockey leagues ( 175 million). In addition, the credit for the supply of vaccines must be increased (100 million), as well as compensation for the shortfall in the field of culture (50 million), due to the ban on major events until ‘at the end of August 2020. However, these last two extensions do not entail additional costs for federal finances, as they can be offset by the reduction in certain credits adopted by way of the first supplement. In addition, additional funds are also being sought in the media (17.5 million) and agriculture (8.5 million).
The additional funds currently requested are all intended to mitigate the economic consequences of the coronavirus pandemic. Most of them are approached as extraordinary financing needs. They must therefore be adopted by a majority of the members of each council (qualified majority).
Since the debt brake rule contains an exceptional provision, it is possible to qualify certain expenses as “extraordinary”. This provision applies because the coronavirus pandemic constitutes an extraordinary event which cannot be controlled by the Confederation.
What are additional credits?
The additional appropriations supplement the budget for the current financial year by making it possible to finance unavoidable charges or investment expenses. They must be authorized by Parliament. Additional credit may be requested when the financial need in question could not be foreseen in time, the delay in acquiring the required service would cause serious inconvenience and it is not possible to wait until next budget. The administrative units must justify the additional credit in detail.
The Federal Council normally submits the additional appropriations to Parliament twice a year by means of a message. Due to the extraordinary situation, four supplements will probably be necessary for the current financial year. They will be the subject of parliamentary debates during the session following their publication.
Address for sending questions
Philipp Rohr, Head of Communications, Federal Finance Administration AFF
phone no. + 41 58 465 16 06, [email protected]
Federal Department of Finance