The coffers of Freienbach's town council are positively bulging with SFr66m in capital and a further reserve of SFr43m, leading officials to slash local taxes.

The town council of Freienbach, which is situated 30km south of Zurich, has already invested millions in state-of-the-art schools and luxurious sports facilities including three swimming pools. Juerg Daniel Matthys, an artist who lives in the town, said that Freienbach was 'not a poor region ... a lot of bankers live here.'

But living in a wealthy town has a downside. Mr Matthys welcomed the decision to lower taxes but he noted that there were disadvantages to living in Freienbach: 'It's a problem because the houses are very expensive ... most of the people who live here work in Zurich,' he said. Freienbach residents such as billionaire banker Martin Ebner (whose BZ bank is also based in the town) account for most of the town's wealth.

As one of the world's wealthiest nations, Switzerland is said to be the biggest centre of private banking, with more than a third of all private wealth based there. Thus the story of Freienbach's bulging coffers is no surprise. Indeed, this year the Swiss government itself expects a significant federal budget surplus. In a press release last week, the government stated that the surplus was a result of an unexpected boost of economic growth which raised fiscal income and allowed for higher repayment of debt.

After the 2001 budget, the Swiss government expects to be in the black for a few years to come. The long-term budget anticipated the surplus to be at SFr 200m in 2002, SFr1.1bn in 2003 and SFr1.3bn in 2004. The Finance Ministry declared there was a good budget discipline on the spending side and claimed that economic growth saw 3.0 percent this year which was far better than expected by the government and by independent forecasters. As a rule, just one percentage point of higher economic growth adds SFr500m to tax revenues. By the close of the third quarter, total tax revenues stood at SFr35.996bn, which was 86 per cent of the total budgeted figure for the full year of SFr41.758bn.