Cost trap bureaucracy: Switzerland must act now

International uncertainties and an increasing shortage of skilled workers are putting Swiss companies under noticeable pressure. At the same time, the regulatory and bureaucratic burden on companies and agricultural businesses continues to increase. A total of 203 new laws and ordinances were created or amended in the last legislative period. Even at the halfway point of this legislature, it is clear that the number of regulations continues to grow.

30 billion francs in avoidable bureaucratic costs per year

Excessive regulation and high bureaucratic costs are a burden on both companies and agricultural businesses and hamper growth. A new study by BSS Volkswirtschaftliche Beratung AG (BSS) and the ifo Institute shows:

• Other countries are more efficient: Scandinavian countries such as Sweden and Denmark make their administrative processes significantly more efficient and digital.
• High avoidable bureaucratic costs: The international comparison shows that Switzerland has considerable potential for improvement in the efficiency of administrative processes.If Switzerland had implemented an internationally comparable reduction in bureaucracy ten years ago, GDP per capita would be around 5 percent higher today.The comparison shows that over CHF 30 billion in bureaucracy costs could be avoided every year. The total regulatory costs are even higher. According to a projection by the Swiss Trade Association, they amount to around CHF 80 billion.
• Reducing bureaucracy increases productivity: A comprehensive reduction in bureaucracy would relieve the burden on small, medium-sized and large companies and farms alike, and it would also counteract the shortage of skilled workers: many employees currently spend too much of their working time on administrative duties. According to the BSS and the ifo Institute, a reduction in avoidable workloads could free up over 55,000 full-time jobs for productive activities.

Business and agriculture call for concrete measures

In August, the Federal Council decided to intensify its efforts to strengthen Switzerland as a business location. It instructed the relevant departments to draw up proposals to ease the burden of existing regulations and to consider postponing projects that have not yet been completed. For the four umbrella organizations it is clear: now is the time to act. Concrete steps must follow. The four umbrella organizations are calling on the Federal Council, Parliament and the administration to act consistently and drive forward the reduction of bureaucracy by the end of the legislative period.

Christoph Mäder, President of economiesuisse, emphasizes: "The economy needs tangible relief now. We are calling for the digitalization of all interfaces between business and administration, a halt to new sustainability regulations and a rethink of environmental and energy regulations. This is the only way for Switzerland to remain competitive and innovative."

Fabio Regazzi, President of the Swiss Trade Association and entrepreneur, says: "The Business Relief Act initiated by the Swiss Trade Association sgv must now be implemented consistently. Motions submitted by members of the Chamber of Commerce and by myself also call for a brake on SME regulatory costs. Bureaucracy hits SMEs harder than corporations. For the trade association, it is therefore not just about the efficiency of enforcement, but above all about combating unnecessary regulation per se."

Severin Moser, President of the Swiss Employers' Association, emphasizes: "Switzerland is no longer a role model, even in Europe, when it comes to the fiscal quota. It has long since lost its 'lean state'. One of the biggest drivers of this is demography and the way it is dealt with in the context of social policy. Instead of constantly increasing taxes and wage contributions to finance the first pillar, we finally need a genuine, structural reform."

Markus Ritter, President of the Swiss Farmers' Association, adds: "The increasing overregulation is restricting the scope of farms that want to develop sustainably and for the future. Structural plant protection, for example, demonstrably holds great potential. However, strict requirements and licensing obligations are hindering the construction of greenhouses or foil tunnels in many places. This is just one example of many where corrections are urgently needed."

Less bureaucracy - more prosperity

Easing the burden on companies and farms is not an end in itself: less bureaucracy creates prosperity, strengthens competitiveness and leads to higher tax revenues in the long term. An attractive location attracts investment, promotes business start-ups and creates sustainable jobs. We therefore need a comprehensive reduction in bureaucracy now in order to strengthen the attractiveness of our business location.

Questions:

Silvan Lipp, Head of Communications, +41 44 421 35 57, [email protected]

Simone Hinnen, Head of Communications and Campaigns, +41 76 373 79 74, [email protected]

Stefan Heini, Head of Communications, +41 78 790 66 32, [email protected]

Markus Ritter, President of the Swiss Farmers' Union, +41 79 300 56 93, [email protected]