OECD says Swiss can do more to boost growth

Malcolm Curtis
Malcolm Curtis - [email protected] • 10 Feb, 2015 Updated Tue 10 Feb 2015 07:41 CEST
image alt text

Switzerland's economy has outperformed most other countries but the OECD in a new report says the mountain country needs to take a range of measures to ensure long-term growth.

The Organization for Economic Co-operation and Development says the Swiss need to improve access and equity in education, cut producer support for farmers and reform the tax system to ensure future productivity gains.

It also calls for steps to improve the efficiency of Switzerland's expensive health system and to encourage more women to work full-time.

The proposals are included in the Paris-based organization’s “Going for Growth” report issued on Monday to coincide with the start of the G-20 finance ministers meeting in Istanbul.

The report notes that Swiss per capita income remains above the average for OECD economies but that “productivity is lacking”.

It says that long-term growth is being limited by “skills shortages, low enrolment in tertiary education and weak educational outcomes of pupils from low socio-economic background (especially immigrants).”

The OECD advises Switzerland to step up public funding of pre-schools and to increase immigrant participation through “targeted pre-school cash support”.

For more on the report, check here.

It suggests means-tested grants to improve access to tertiary education for students from poor and immigrant backgrounds.

The report criticizes high financial support for farmers through price supports, direct payments input subsidies, border protection, quotas and tariffs.

These, it says, have adverse effects on productivity, trade negotiations, the budget and the environment.

The organization says that all forms of farm price support should be scrapped with direct payments targeted for environmental benefits.

It recommends that Switzerland tax fertilizers and methane emissions, end farmers’ exemption from the mineral oil tax and “remove impediments to shifting agricultural land to other uses”, among other actions.

The OECD, meanwhile, said that Switzerland could boost labour productivity by shifting part of the tax burden from direct to indirect taxation.

Among other things it calls for corporate tax reform, higher-value-added tax (VAT), a carbon dioxide tax on fuels and lower personal income taxes.

The report is also critical of the shortage and high cost of child care and other factors, including a “weak corporate culture of gender diversity” which lead many women to work only part-time.

It advises higher public spending on childcare, a “corporate governance code” to set goals for more women in management and to change the way spouses’ income is taxed.



Malcolm Curtis 2015/02/10 07:41

Please keep comments civil, constructive and on topic – and make sure to read our terms of use before getting involved.

Please log in to leave a comment.

See Also