PHILIPSBURG–After the slump of 2016, St. Maarten’s finances are “on the upward track,” said Age Bakker, Chairman of the Committee for Financial Supervision CFT. However, he warned that a final judgement on the actual financial state will be determined once the 2016 Annual Accounts and the report for the first quarter of this year are presented for examination.
Bakker described 2016 as a difficult year in which the economy was flat as forecast by the Central Bank of Curaçao and St. Maarten. Factors contributing to the slump were the low cruise arrival numbers and the stringent budget.
Finance Minister Richard Gibson, Sr. has “succeeded” with his predicted surplus for 2016, the first such since 10-10-10, said Bakker based on information given to CFT. The final quarterly progress report showed a budget surplus of NAf. 26.4 million in 2016, which is NAf. 1.1 million higher than originally budgeted.
A significant amount of income, including a one-off payment by utilities company GEBE, was realized in the fourth quarter to make up for earlier shortfalls during 2016. Due to difficulties with the financial systems, the final result over 2016 can be subject to change. Therefore, CFT is not taking the claim at face value and has urged Gibson, Sr. to complete the 2016 Annual Accounts and have them audited “as quickly as possible.”
The surplus, once established, will not stay in Government’s coffers to be available for projects. It will be used to service Government’s debts to the General Pension Fund APS and the Social and Health Insurance SZV.
Bakker reiterated CFT’s call for Government to finalise at dividend policy for its companies as means of reducing or removing completely its reliance on incidental funds to balance its budgets. The 2017 budget was balanced due to heavily to incidental income. CFT will revisit the dividend policy, which should take into account the strategic business plans of the entities, the required solvency ratios and their capacity to pay dividends, with Government in June.
Income for January and February this year has been “a bit above estimates” based on information from Gibson, Sr. However, CFT will match this claim when it receives the first quarter report from Government in the coming weeks.
Since the 2017 budget relies more heavily on incidental income compared to previous years, strict monitoring is necessary, according to CFT. Government has been asked to realize the budgeted incidental income more early to avoid uncertainty later in the year whether the budget will be realized.
CFT has requested Government to make headway with processing the Annual Accounts of 2013, 2014 and 2015 by Parliament. “In general, too little progress has been made on improving financial management,” said Bakker.
Bakker, along with CFT members Maria Plantz (St. Maarten) and Sybilla Dekker (Netherlands), were in St. Maarten this week for a regular working visit. They met, with among others, Governor Eugene Holiday, Parliament and the Council of Ministers, APS, SZV and Postal Services St. Maarten (PSS).
Source: The Daily Herald https://www.thedailyherald.sx/islands/64821-bakker-st-maarten-on-upward-track-financially