How Switzerland got its government right and where we went off track

By TONY MOBILIFONITIS
ON May 30^th 2024 a group of prominent freedom fighters will converge on Geneva Switzerland to protest the global policies of UN organisations that are housed there – the World Health Organisation and the Global Vaccine Alliance (GAVI) in particular.

Those freedom fighters might ask exactly why the WHO and dozens of other globalist organisations are actually based there. One reason may not be as sinister as we think and indicative of the Swiss system itself.

In an interview on New Zealand’s Reality Check Radio, Dr Oliver Hartwich, a guest of former Act Party MP and Minister Rodney Hide, explained how the Swiss system of government is the mirror opposite of the present-day Westminster systems of the UK, Canada, Australia and NZ.

One major reason for those organisations being based in Switzerland is that, ironically, the Swiss government is highly decentralised and non-interfering, leaving foreign organisations and businesses to go about their work largely as they like, within the rules of local councils and Cantons.

Those businesses and organisations will also being paying minimal, amounts of tax under Switzerland’s decentralised three-tier tax system. Unlike our councils, the 2900 or so local councils (geminde) that operate within the 26 cantons (counties) all get a share of tax from these new business in their area, and those councils and Cantons compete against each other to offer the best rates and/or best deals.

In other words, and to the contrary of what happens in Westminster system councils, Swiss councils are incentivised to attract and offer good deals to newcomers because not only will they boost their local tax, but allow the council to reduce the going local tax. The city of Zurich (pop. 420,000) is the largest council and the smallest Corippo with less than a dozen people.

In Australia and New Zealand, councils are forced to fleece ratepayers at higher rates year after year in order to pay for the infrastructure they must provide for new housing and industrial developments. This is essentially because Aussies and Kiwis have voted centralists into power on a regular basis.

Hartwich is executive officer of an organisation called the NZ Initiative, a libertarian-leaning think tank that seeks to improve government in New Zealand. Hartwich took a group of Kiwi political and business leaders, including Chris Luxon (now Prime Minister), on a tour of Switzerland to show them how the system works.

It is currently clear to many people that the increasingly centralised Westminster governments at all levels are dysfunctional, oppressive and running headlong into a globally centralised tyranny. The question is, can they be turned around by a process of decentralisation. A separate North Queensland state and/or Northern NSW state would be a good start in Australia.

Hartwich has a 20-year history in dealing with Switzerland through a group called Policy Exchange in Westminster where he worked as a policy researcher. They were tasked with the idea of reforming British planning laws and make building easier.

He discovered that while British house prices since 1970 had increased by about 4% a year, prices in Germany and Switzerland were much more stable. He obtained a travel grant to investigate the reasons for this in Ireland, Australia, Switzerland and Germany. “This started my lifelong fascination with Switzerland,” Hartwich told Hide.

In Germany, in his home city of Essen in the Ruhr, Hartwich discovered that Germany, like Switzerland had a competitive tax system where local government was entitled to a share. As a result the local government worked primarily for the interests of the local area, minimising tax but also seeking new taxpayers.

From there Hartwich went to Zurich where he discovered that the Swiss taxation system was even more direct and more decentralised with three tiers of income tax. The federation at the top receives about 20% of all tax and the remaining 80% is shared nearly equally between the cantons and the councils.

“Switzerland is geographically about the size of Canterbury in New Zealand but with a population of about 9 million, apparently, they have 26 cantons and 2000 councils (a council website says 2900), and each canton and each council sets their own income taxes,” he said.

“Imagine that, they don’t have just one income tax system for all of Switzerland they have more than 2000 separate income tax systems – now imagine what that does.”|

Hartwich said that for someone with a decent income in Switzerland, travelling just a few kilometres could change your taxation bill by 10s of thousands of francs. “And so what it means is first of all is that the cantons and councils have to compete with one another – a bit like businesses – so they compete quite actively like businesses to get people into their areas because they are the taxpayers.

“And then they also have to compete in being nice to those taxpayers, otherwise they move away again. They also compete in the delivery of public services. For example if you need a building consent and your council is not nice to you and treats you not like a customer by being mean then they might lose you as a taxpayer, so they have to be much nicer to their taxpayers than say councils in New Zealand. It makes a massive difference.”

Hartwich described his meeting with the planner of the canton of Schwyz in 2005 who was originally reluctant to meet. However, over a beer, he explained how he was the most popular guy in the canton because he had brought in hundreds of new residences and as a result the income tax rate was able to be lowered while infrastructure was also paid for.

“So whenever it comes to development, the canton, the council, they receive a lot of the upsides of that development and that enables them to build the roads, build the pipes, build the swimming pools, upgrade the library and then with the money that is left over they also deliver an income tax cut…”

This made development popular in Switzerland, whereas in Britain, Australia and New Zealand a new development could only be funded by making everyone pay higher rates. Hartwich has since focused the work of the NZ Initiative into introducing as many business and political leaders as possible to the Swiss system.

Hide commented that the Swiss system, with its multiplicity of competitive councils and cantons, was the antithesis of the council system in the UK, Canada, Australia and New Zealand, and there was even a push via tax treaties to make taxation the same across numerous countries.

Hartwich said this was not always the case in these countries, and history showed that the councils were much more decentralised 100 or 150 years ago. In NZ at the start of the 20^th century central government spent only 7 to 8% of GDP and local government 2%. But in recent years central government expenditure had ballooned to around 30% while local government stayed the same.

Many Cairns News readers will note that Australia appeared to operate quite efficiently and happily with the multiple councils that were still around in the 1980s, before the big push for amalgamation started.

The full interview with Hartwich can be heard on Rodney Hide’s Real Talk show playbacks.