PHILIPSBURG–Finance Minister Richard Gibson Sr. issued a call to Members of Parliament (MPs) to take a non-partisan approach by approving the amendments to the 2017 budget he tabled in the legislature on Wednesday morning. The amendments are to make room for some NAf. 67 million liquidity support from the Dutch Government.
The budget amendments are crucial for the country to receive much-needed liquidity support from the Dutch Government following the devastation and economic downturn caused by to Hurricane Irma slamming into the country on September 6.
“It is not a partisan issue,” Gibson Sr. told those MPs who broke their annual holiday recess to attend the sitting. “It is an essential step” to help Government’s liquidity position at least until March by fending off any default.
Gibson Sr. said that despite “the unwarranted motion of no confidence” passed against him and his fellow Ministers in November, he has been working hard to ensure the incoming Government has money to meet its obligations and not default in any way.
The amendments to the budget must take place before this year ends. If the amendments are not approved, the country will lose out on already-agreed-to liquidity aid that will tide its operation over until February or March.
Should the amendments, which include a multi-million-dollar hospitality re/training programme and a roof-repair project, not be approved, the country would find it difficult to meet its obligations to pay salaries and could default on other financial commitments.
With only two working days remaining in 2017, Gibson Sr. implored MPs to pass the changes. The changes will now be tabled in a plenary session of Parliament on Friday.
The urgency for approval of the changes stems from the Dutch Government’s budget operating on a cash basis. Expenditures for a given year must be handled in that year and cannot be taken over into a new year. Therefore, St. Maarten has to make room for the liquidity assistance as soon as possible or lose it, as it is tied to the Dutch Government’s 2017 budget.
The changes to the 2017 budget are “basic” and “minor.” However, they will not erase the huge deficit with which Government will end the year due to the aftermath of Hurricanes Irma and Maria. The total established budget for this year was NAf. 478.1 million in income that has dropped to NAf. 356.9 million. Expenditures have soared to encompass the major clean-up of hurricane debris, welfare pay-outs and other hurricane-related cost. Government’s bills amount to NAf. 510 million, growing from the approved NAf. 458.1 million.
Gibson Sr. was also very keen on ensuring that MPs understood the difference between Government receiving liquidity support from the Dutch Government and budgetary support. The Dutch are prepared to give both forms of support, but the budget amendments are related to liquidity support.
“Liquidity assistance has to do what’s in the bank. This means you get funds as a loan to keep your head above water. It has nothing to do budgetary assistance,” he said.
There is “nothing in writing” about some 40 million euros in budgetary assistance from the Dutch Government. This could come after discussions with the World Bank about planning for 550 million euros in recovery aid.
Source: The Daily Herald https://www.thedailyherald.sx/islands/72226-gibson-calls-for-non-partisan-approach-to-budget-changes