From a financial perspective, Switzerland could definitely afford a larger military force (defence expenditure is around 0.6% of the GDP, as a comparison the NATO sets the guideline to 2% of the GDP [Note: Switzerland is not part of the NATO, but it is a useful comparison to neighboring countries]).

The question is solely political, how much money is Switzerland willing to spend for an army/airforce? And this question undoubtedly correlates with the current feeling of safety and threat of conflict.