PHILIPSBURG, Sint Maarten — Accumulated deficits from last five years. Projected incomes did not materialize. Amounted to NAf. 60 million. 2015 shotgun budget because of demands from The Hague.
Premiums collected from civil servants’ salaries were not paid to these institutions and used to pay government’s operational expenses. SZV 83 million and 60 million to APS by the end of 2015. Accumulated debt of NAf. 200 million and shotgun approach.
2015 to sell new government building at 40 million and refinance remainder of debt owed by government, about 103 million. Problem with financing that debt is asking for a new loan to pay off an old loan, and start all over again with new loan for same debt. CFGT rejected this. Instruction given to St. Maarten was pay off debt and not finance debt again. Gave up on any further efforts to finance the debt.
In the budget for 2016: new government building sold to SZV NAf. 45 million. NAf. 42.5 million will be applied to reduce debt. NAf. 19.5 million of the remainder will be used to pay the debt of APS. APS will also purchase the lots west of the new administration building and build a multi-parking garage. Division of the assets to St. Maarten from old Netherlands Antilles will be paid to APS to cover debt and St. Maarten will pay 20 million a year to SZV.
Government has the option of repurchasing that building at anytime if it so desires. Win, win, win, situation. Government pays off its debt, gets rid of instructions of Kingdom Council of Ministers imposed on St. Maarten to balance its budget, and removes any concern on part of CFT to ask Parliament to approve. Benefits are numerous.
Reserves coverage for pensioners was insufficient. With this arrangement, the coverage of reserves at APS. APS will have a parcel of land to develop and generate income. Pension reform once executed will increase multiple percentages and make sure that the fund is viable and sustainable. Should be no concern from senior citizens anywhere. Same for SZV. No need to worry about debt because money paid down from sale of government building and lease gives them fixed long-term investment, which is a healthy rate of return in the current financial world.
In for a hard time. Third quarter of 2015: GDP numbers shown for US dropped to 0.7% and maybe GDP growth for us just over 1%. It’s crucial we obtain access to the capital expenditures budget and borrow to invest. That would balance things out substantially for St. Maarten.
Need more room. Debt could increase. Debt to GDP ratio, almost the best in the world. To move that up a couple percentage points, will give capital to make investment that should have been made since 10-10-10. Asking St. Maarten to voluntarily limit its borrowing to 40% of GDP. The law is the law. Always used against us. That’s what the CFT law says, and then we will abide by.
What limit should rate that to. It could be 50% safely. Now comes the opportunity to be able to access capital to make investments in St. Maarten to be able to strengthen St. Maarten’s economic foundations. Invest in people. By approving this budget, you would be setting the stage for budget 2017.
Advantages for balanced budgets: Ask the CFT to remove yourself, will then have the right to put out own CFT in place. If you care about the process, approve the budget. Not a budget will win a beauty contest, but also consider time that we have.