CFT Ready to Grant St. Maarten an Extension so that incoming government can find amendments to balance its budget
PHILIPSBURG:--- The board of the CFT informed members of the media that they met with several parties on St. Maarten including the Governor, Council of Ministers and Parliament as they updated the various entities and gathered information on how St. Maarten is progressing with its budget issues. During that press conference St. Maarten's representative Richard Gibson did not attend. Age Bakker chairman of the CFT informed the media that after holding some discussions with Gibson he decided not to participate in the discussions.
Bakker said that the budget of 2014 has a deficit of Naf. 10M and the Government of St. Maarten has to take up that deficit in its 2015 budget which the Minister of Finance Martin Hassink said he cannot come up with those amendments as requested by the CFT. Bakker said that the Government of St. Maarten saw a shortfall in their predicted income as of September 2014 which created the deficit; therefore that deficit must be taken up in the budget of the following year.
Bakker said that the Governor of St. Maarten informed the CFT that the Government of St. Maarten cannot meet the December 15th deadline. The CFT chairman said he informed both the Governor and the Council of Ministers that if they submitted an official request to the CFT they are willing to grant them an extension until the end of January 2015. So far Bakker said the CFT did not receive that formal request but said that the Government of St. Maarten still has time because their deadline is December 15th, 2014.
Bakker said that while the CFT will grant the extension one of the first things the new government has to work on the moment they take office. "The new government must come up with amendments to cut the NAF. 445M draft 2015 budget by NAF. 10M.
Another issue the CFT feels government has to deal with urgently is the resolve the long pending issues of payment they have with APS and SZV.
2014 budget execution
The 2014 budget execution is expected to end with a deficit of approximately ANG 10 million if no additional measures are taken. The deficit is caused by higher personnel expenditures and lower revenues than budgeted. The CFT was informed that government is currently exploring the possibilities to raise dividends from the government owned entities to cover the deficit. The CFT reminded government that any remaining deficits need to be compensated in future budgets.
2015 draft budget
In October 2014 government presented the draft 2015 budget for advice. In its advice, the CFT recommended to lower the budgeted revenues of NAF. 445 million to the level of approximately NAF. 426 million, reflecting the level of revenues which were actually realized during the last few years. The CFT has been informed by the government that the budget 2015 including the necessary adjustments will not be ready before the legal deadline of December 15. It was agreed that government will formally request for a postponement until January 31, 2015. The CFT will honor this request which will enable the incoming government to present an amended budget in accordance with the Cft advice. The Cft stresses the importance of preserving a timely presentation of the budgets, a goal which has seen considerable improvement this year. Therefore the Cft will have to revert to procedures in the Kingdom Law if the deadline is not met.
Multi annual approach
It has been a continuous challenge for Sint Maarten to balance the budget. This reflects the ongoing discussion on the appropriate size of government for the country Sint Maarten. The Cft recognizes the desirability of formulating a multi annual approach for building up government institutions and providing the appropriate level of public services. The Cft has noted earlier that government revenues do not keep pace with economic growth and therefore strengthening of the tax system should be a priority for the incoming government.
Payment arrears
The CFT points out the lack of progress to solve the existing payment arrears with both SZV and APS. This situation cannot be allowed to continue. The CFT advises the incoming government to solve this issue as it is not in the interest of the people of St. Maarten.