Minister Gibson lowers 2016 budget to 445 million “Serious reductions in expenditures necessary”

Finance Minister Richard Gibson. Photo Today / Hilbert Haar

St. Maarten – The Ministry of Finance will not devote any more energy to the 2015 budget, Minister Richard Gibson said yesterday. Instead, the focus is on the 2016 budget with – considering government’s history – a completely new approach. Gibson’s predecessor Martin Hassink spoke in September still about a budget of 485 million guilders, but Gibson is aiming for a more realistic level of 445 to 450 million, meaning that the seven ministries have to find agreements on cutting 40 million guilders from the draft budget the previous Council of Ministers approved.

In August. Former Finance Minister Hassink said that the budget needed a trimming of 50 million guilders. In the end, it was brought down from 540 to 585 million guilders. Minister Gibson now intends to bring down the budget to a more realistic level of 445 million.

“This projection is based on historical data,” Gibson said at yesterday’s Council of Ministers press briefing. “We look at what is reasonable and bring expenditures in line. In the past we started looking at what our expenditures would be and then the government was going to do this or that to close the gap between these expenditures and the projected revenue. None of these projections have ever been met. Always the budget was not balanced. Now we will start with the cake that we have, but we will still design strategies to increase revenue. When that revenue materializes, we can always make that cake bigger.”

Minister Gibson said that “serious reductions in expenditures” are necessary to arrive at a balanced budget of around 445 to 450 million guilders.

The minister said that a solution has been found for the payment arrears to social insurance agency SZV and to pension fund APS – totaling around 150 million guilders. “We settle that in the 2016 budget in in the multi-annual 5-year budget,” Gibson said.

The Minister emphasized that the country needs to generate more revenue. “Tax compliance is low. I will come with a methodology that will effectively create awareness that paying your share is necessary and mandatory. We don’t want to raise taxes, we just want what we should get. If we manage that, our budget problems will be solved quite easily.”

A balanced budget, Minister Gibson said, will trigger an important mechanism: it will give St. Maarten access to funding for capital investments.

Source: Today SXM Minister Gibson lowers 2016 budget to 445 million “Serious reductions in expenditures necessary”