Are taxes wasted in mountainous regions?

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Is taxpayer money wasted unnecessarily in the surrounding areas and mountain areas? At least, so says the subsidy report of the Swiss Institute for Economic Policy (IWP) at the University of Lucerne.

The institute took a closer look at the subsidies paid annually by the federal government and classified them according to a traffic light system. As Blick reports, subsidies rated red are therefore economically “harmful” and can be canceled or at least greatly reduced.

Unfair favoritism for the tourism industry?

Populations in mountainous areas are unlikely to be satisfied with deletion recommendations. For example, IWP proposes the cancellation of CHF 83 million for innovation and cooperation in Swiss tourism. According to the report, the subsidy has a “distorting” effect. It is unclear why the public prefers a particular sector to other sectors of the economy, which are tax funds. But the cancellation of such funds would hit the tourism-based mountain cantons such as Valais, Ticino, Graubünden or Bern particularly hard.

Swiss Tourism receives the 57.5 million francs not only as a gift, but also for a clear service mission: to market tourism and attract guests, more than half of which come from abroad. “Individual players in Switzerland are virtually impossible to appeal to and win over these guests, so they depend on a common, coordinated marketing platform co-funded by the federal government,” says Umbrella media spokesperson Markus Berger. organization Swiss Tourism. At the end of the day, craft businesses or hotel suppliers, for example, also benefit from these guests.

No more money for small projects in the mountain area?

The IWP is also critical of the 25 million Swiss francs per year that go into the New Regional Policy (NRP) coffers. A-Fonds-Perdu contributions or interest-free loans always balance the realization of a project in mountainous regions. One such project is the village hotel “Poort A Poort” in Grangiols VS.

Many old apartments in the small mountain village have been empty for years. 13 beds spread over two buildings, as a decentralized village hotel, will welcome guests next year, thus enlivening the village centre. An NRP loan of CHF 450,000 is available for financing. “NRP funds are important start-up funding for projects in mountainous regions,” says Monika Holzegger, one of the project team. Funds are subject to net terms. The team had to demonstrate in a business plan that the village hotel could be operated independently.

“To provide employment and added value”

However, from IWP’s point of view, funding such projects doesn’t make much sense. After all, there is no such thing as a market failure. However, market players can now use NRP funds to gain competitive advantage at the expense of the general public. It is also difficult to obtain equal funding for different regions. Moreover, the national fiscal equalization system already provides cash injections for structurally weak cantons. This equalization tool pours more than two billion Swiss francs into the coffers of mountain cantons every year.

However, without public funds, the construction of businesses such as the planned village hotel in Grengiols would be unlikely at present. Private investors and banks are reluctant to invest in small, often very specific projects without big return expectations—probably not without reason. “But such projects provide important work, new value-added cycles, and thus increase the attractiveness of living,” says Holzegger. This is exactly why politicians create NRP funds.

Source :Blick