Minister Gibson: “We are in a financial crisis” Increased road tax on hold, just 400 million available in 2016

St. Maarten – While Cft-chairman age Bakker saw ‘light at the end of the tunnel’ during a press conference on Tuesday, Finance Minister Richard Gibson sang a different tune at yesterday’s Council of Ministers press briefing: “We are in a financial crisis.”

The good news: Minister Gibson announced that he will put the increase of the road tax on hold, because the current draft “does not give consideration to the social impact.” The central committee meets this afternoon to debate the draft, but the minister has already taken the air out of a potentially heated debate.

“Why should someone driving an SUV pay the same as somebody who drives a small car?” the minister said. “That should be corrected. This was done by the previous government but I will ask the parliament to put the legislation on hold so that we can build in the social aspect whereby owners of larger cars pay more than owners of smaller cars.”

A second piece of good news was the minister’s announcement that he will propose in the Council of Ministers to grant a small Christmas bonus – 200 to 250 guilders – to civil servants in scale 5 and lower. “That the budget is not balanced is not their fault,” he said. “Why should they suffer?”

Minister Gibson main concerns are about the budget and the financial situation the country finds itself in. “Since 10-10-10 we have not had balanced budget,” he pointed out. “We have built up deficits of 60 million guilders and we have to compensate them in the next three years. That is one component.”

The other component is payments on the principal of the debt St. Maarten took over from the former Netherlands Antilles. “In September we have to make a payment of 26 million guilders,” the minister said.

These payments have to be deducted from the expenditures St. Maarten can incur in 2016. On a budget target of 445 million guilders, this means that there will be no more than 399 million to spend.

“It is not like I came in here as the hatchet man,” the minister said. The question is how we are going to survive financially under these circumstances. We cannot continue with business as usual. That is the reality.”

Other bad news: the unpaid premiums to social insurance agency SZV (70 million) and unpaid premiums to pension fund APS (80 million).

“Just look at that picture,” Minister Gibson said. “And this could be just the tip of the iceberg. Last week I said that we have to bite the bullet; there are steps that have to be taken,”

That there are obligations and contracts to honor could very well be, the minister added. “But the cake we have is around 400 million. That is the crisis I am talking about. No one becomes popular by saying no, but this is not a popularity contest. This is about survival, about keeping our population safe. We have to row with the oars we have and we have to adjust to the means that we have. Someone has to say: the buck stops here.”

Minister Gibson announced his intention to impose stricter controls on the budgets of the individual ministries. “Monthly,” he said, “Not once a year. I will propose a method to adopt this.” The minister said that the country’s liquidity position had “hit rock bottom” and that he had asked banks for an overdraft of 5 million guilders to cover expenditures up to the second week of January. “I had to do this because the money is not there,” he said. “I cannot create something out of nothing.”

Asked about the “package of measures” that are mentioned in the explanatory notes with the amendment to the road tax ordinance, minister Gibson said that – as the Cft has also pointed out – so far, none of the announced intended revenue-increasing measures by previous governments have worked out. “I intend to put measures in place first, before I include them in the budget,” he said.

Source: Today SXM Minister Gibson: “We are in a financial crisis” Increased road tax on hold, just 400 million available in 2016