The Committee for Financial Supervision CFT allowing St. Maarten until the end of January to approve the 2016 budget (see Wednesday edition) is undoubtedly most welcome. It gives the
incoming NA/DP/USP/Matser/Lake government time to get the country’s finances in order and incorporate the targeted instruction from the Kingdom Council of Ministers.
Not that doing so will be easy. After all, 2015 is going to end with a remaining deficit of 20 million guilders, amounting to a combined total shortfall of 60 million going back to 10-10-10. It turns out this has to be compensated in the next three years, while the arrears to Social and Health Insurance SZV and general pension fund APS must be settled and another payment of more than 20 million guilders related to the Antillean debt relief provided by the Netherlands apparently is due in September.
It must be said, although unexpectedly having to pay out NAf. 10 million in overtime hours at the Justice Ministry as reported was perhaps understandable because of the crime situation, one would think based on previous experience at least some means could have been reserved for this purpose. That another NAf. 10 million in healthcare coverage for civil servants was never budgeted raises even more questions.
The intention is now apparently to start servicing the debts to SZV and APS, which will place an additional burden on the budget for years to come. All nine ministers have been told to seriously reduce cost and that is probably not what the William Marlin Cabinet had bargained for when it recently took office.
On the other hand, in today’s paper alone Finance Minister Richard Gibson denies rumours of cuts in the vacation allowance of public sector employees, expresses his desire to pay those in the lower salary scales a Christmas gratification and announces plans to hold off on the intended motor vehicle tax increase because he considers it unfair. None of these positions would appear to immediately contribute to the treasury.
Take into account also the overdraft of NAf. 5 million requested and it becomes clear that a daunting task lies ahead, but the reality is that one can’t keep spending money that simply isn’t there. Improving fiscal compliance is the obvious long-term answer, but it probably will take quite an effort to bring the Tax Department and Receiver’s Office up to a level where this actually can be achieved in a meaningful manner.
