St. Maarten Budget debate postponed until February 29

Cft appreciative but requires minor changes to 2016 budget

St. Maarten News – Handling of the draft 2016 budget has been postponed until February 29, after Finance Minister Richard Gibson received advice from financial supervisor Cft about a few required adjustments. The minister had sent the draft budget to the Cft ahead of the budget debate in parliament to speed up the process. With the required adjustments in place there is no need for budget amendments.

Minister Gibson received a reaction from the Cft on Thursday. “First of all the Cft wanted us to incorporate a commitment in the budget that our share of the division of assets from the former Netherlands Antilles would go towards the debts to social insurance agency SZV and general pension fund APS. However, the Cft did not have the agreement yet that we signed with SZV and APS. This commitment had already been made and the Cft was running a little bit behind.”

The second remark concerns the financial data for the fourth quarter of 2015. “Those figures have not been compiled yet because the staff has been working hard on the draft 2016 budget,” Minister Gibson said. “These figures will make clear whether 2015 ended with a surplus or a deficit.”

Minister Gibson asked the parliament to postpone the handling of the budget mainly for this reason. Earlier, the budget debate was scheduled for yesterday and then postponed until Monday to give ministers more time to gather information Members of Parliament asked for during meetings of the central committee this week.

A third requirement from the financial supervisor is that the government incorporates the full amount of APS premiums in the budget. Since 10-10-10 successive governments have booked these premiums at 22 percent while the law prescribed that it should be 25 percent. “The Cft has never said anything about this,” the minister said. “Now they require that we use the 25 percent. This will add 4.4 million guilders to our expenditures.”

The Council of Ministers has already approved draft legislation to lower the legal APS premium from 25 to 22 percent. “Nevertheless we will comply with the request from the Cft,” Minister Gibson said.

The additional expenditures do not require any cuts in subsidies or in the expenditures of the ministries, because the money can be found from the deal the government made with SZV and APS about the sale of the government building on Pond Island and the surrounding parking lot.

A fourth Cft-requirement was a more elaborate explanation of the government’s intentions to lower expenditures. “We will explain this in more detail,” Minister Gibson said.

Lastly, the Cft has asked for a detailed specification of the capital account and for an explanation about the plans to increase tax compliance.

“The Cft expressed appreciation for our approach to the budget, and for using the average revenue over the past three years as our point of departure,” Minister Gibson said. “This is a strong signal from the Cft. If we incorporate into the budget what they have requested then there is a strong probability that we will get a light-green light for the 2016 budget.”

Source: Today SXM St. Maarten Budget debate postponed until February 29