Canton looks to unexpected surplus of CHF 148 million next year

The canton of Zug is looking to a very healthy, if unexpected, surplus of CHF 148.7 million next year.

Last year, the canton was looking to a surplus of CHF1.7 million for that year, yet it turned out to be as high as CHF 149.2 million.

Last year, instead of an expected deficit of CHF 29.5 million, a surplus of CHF 54.7 million was achieved. Now, as director of finance, Heinz Tännler, announced on Wednesday, a surplus of CHF 148.7 million is expected for 2020, this after expected income of CHF 1.68 billion and outgoings of CHF 1.5 billion.

As if this were not good enough, further surpluses are expected in the years 2021-2023.

“This is very good news,” said Tännler, “especially after poorer results in recent years.”  It was explained that the good figures forecast for next year had been as a result of the good, if fragile, economic climate in the canton, in addition to increased income from State taxes, this itself a result of the nation accepting reforms to Corporation Tax and Old Age Pensions earlier this year, leading to increased income of CHF 74.6 million.

In addition to this, thanks to a compromise worked out in Bern in relation to the canton’s contribution to the National Equalisation Fund, the sum Zug is expected to pay annually for the next four years is “only” CHF 330 million, rising again in 2024, but only by a sum which could be compensated by tax returns from Bern.

One other factor in the increase of income is as a result of the increase in the canton’s population, not to mention wealthy international companies moving to Zug.

As to the cuts the canton imposed in recent years, Tännler insisted these had still been essential, and even for 2020 investments amounting to CHF 99 million had been put on hold, with further investments amounting to between CHF 92 and CHF 141 million being put on hold for the following years, too.

The director of finance further announced that the surplus for 2019 was likely to be increased from the CHF 54.7 million announced last year to CHF 70 million, meaning that cantonal employees (administrative staff and teachers) would benefit from further funding amounting to CHF 3.2 million and that some 3,000 residents earning below a certain threshold would benefit from a subsidy from the canton relating to health insurance, with some 3000 more citizens able to claim.

Despite the good news, Tännler warned locals that they should not become too euphoric. “We need to remember the current political and economic situation is very volatile,” he said, and referred to the ongoing trade dispute between China and the United States. “Any uncertainty abroad can soon have an effect on us here in Zug,” he added.