It’s about the big items in the household budget and there’s no way to avoid it: government-controlled prices are rising sharply, and many people’s purchasing power is falling. In September, shortly before the elections, the big shock threatens. This is good news for both parties.
Stefan Bühler, Chiara Stäheli / ch media
And now the rents: From October, housing costs are likely to rise for around one million households – in the order of 5 percent. This is a consequence of the adjustment of the reference interest rate, which was announced on Thursday. And it’s just the latest in a whole series of bad news. If you add up the price increases for electricity that have already occurred and the announced increases in public transport prices, health insurance premiums and now rents, there is not much left of the average family holiday budget.
The issue has a direct impact on the wallet: inflation and the loss of purchasing power will affect many citizens in the decisive phase before the elections, says the political scientist.Bild: KEYSTONE
Particularly unpleasant: It is precisely those items that make up a large part of the household budget of average earners. And there are practically no alternatives: the prices are set by the state or by law. There are no cheaper providers.
Extrapolated to a family with two children, this means additional costs of over CHF 2,600 per year, as the following – fictitious and greatly simplified – example shows. It is based on calculations and forecasts by the stakeholders concerned.
The Mosers live with their two children in a rented apartment, earn around 90,000 francs a year together and receive no state aid. Expenditure on health insurance premiums has already risen significantly this year – by an average of 6.6 percent compared to last year. According to experts from the federal government, there should be an above-average increase in premiums in the coming autumn. If the premiums increase by 7.5 percent, this means additional monthly costs of 75 francs for the Moser family, i.e. 900 francs a year.
A typical household will pay an additional CHF 261 per year for electricity this year due to the rise in electricity prices for the basic supply. Then there are the mobility costs: the Moser family does not have a car and travels by bus and train. She currently pays over 7,000 francs for the family GA travelcard. Because the prices for public transport will also increase by an average of 4.3 percent as of December 10, 2023, the Moser family expect additional costs of 300 francs.
The biggest item in the household budget is still missing: the increase in the reference interest rate and inflation allow the landlord to increase the Moser family’s rent by five percent from the previous CHF 2,000. Means: 100 francs more per month.
All in all, this means additional annual costs of around 2,700 francs – just in the areas of housing, mobility and health. In fact, depending on consumption, there are additional inflation-related costs. It is true that these are partially offset by the cost-of-living adjustment in wages. But in most areas this cannot keep up with actual inflation. The result is a real loss of purchasing power.
Price monitor criticizes wrong political decisions
What is striking here is that for several years now, not only have the prices for classic consumer goods been rising sharply, but also the so-called administered or semi-administered prices. These are the prices that are determined or approved by the public sector. According to the national index of consumer prices, this includes, for example, expenditure on insurance, energy, public transport and training. Since December 2020, costs in this area have increased by 3.9 percent.
This is where the price monitor comes into play. Stefan Meierhans observes those areas in which the competition is not playing or only playing insufficiently. He checks prices that “are set by companies with significant market power or the state”. When asked, he confirms that the price increases are “particularly painful for households with lower incomes, but also for the middle class”.
Bild: BFS Mark Walther
That is why he has repeatedly asked politicians and public companies to “exercise particular restraint in the current period of unexpectedly rapid inflation”. For example, he suggested using previously accumulated reserves to mitigate the price premiums or financing parts of the offers that are in the public interest through taxes instead of fees.
But he was not always able to implement his recommendations at the political level. The interest rates on the power lines are still too high. And there is also a need for action with regard to drug prices and hospital tariffs.
Politics is partly responsible for rising costs
According to the Consumer Protection Foundation, the situation for consumers is becoming “increasingly unbearable”. The rising prices would become a serious problem for many households. The foundation has therefore been sending out a newsletter with specific savings tips for several months. There it is recommended, for example, to avoid paying in installments or to have things repaired instead of buying new ones.
Consumer protection locates the causes of the increase in costs in the current world situation with rising interest rates and rising energy prices. On the other hand, politics also play a role: “Health insurance premiums are rising, among other things, because Parliament is preventing effective cost-cutting measures.” And the increase in ticket prices for public transport is largely due to the reduction in federal contributions to regional transport – i.e. to the savings targets of Finance Minister Karin Keller-Sutter.
The foundation advocates expanding premium reductions, strengthening the role of the price monitor and abolishing the basic flat rate for electricity. However, politicians have “so far not shown the willingness to relieve the burden on consumers”.
Prices rise in the middle of the autumn elections – two parties are likely to benefit
It’s unlikely to stay that way. Because the biggest cost shock will hit the population in September, when the high increase in health insurance premiums for next year will be officially announced. And many tenants will then also have to adjust their standing order with the bank upwards, as the announced rent increase will take effect in many places from October 1st.
Both coincide almost with the week in which the documents for the October 22 elections were sent out. “The topic of loss of purchasing power has become a trend topic this year at the latest. Autumn is the perfect moment to mobilize voters on this issue,” says Lukas Golder from the opinion research institute GFS Bern: The problem of inflation has what it takes to get people to the ballot box at short notice. “It’s about developments that are directly noticeable in the wallet – and at the same time the election brochures are on the kitchen table,” says Golder.
But who benefits? In the left-wing camp, the issue could play into the hands of the SP, which, together with the unions, has been running a campaign on purchasing power for some time, says Golder. This should be at the expense of the Greens. He sees the SVP at an advantage with the middle class: The sympathizers of the FDP are rather well off and less price-sensitive. Experience has shown that people who rarely take part in elections would be more strongly approached by the SVP, which should score points with its campaign against immigration in the rental sector, for example. (aargauerzeitung.ch)