PHILIPSBURG–While Government currently has NAf. 116 million in “liquid funds,” huge deficits are expected this year as well as in 2018 and 2019 as a result of the impact of Hurricane Irma, which devastated the country on September 6.
The projected deficit for 2017 is NAf. 146 million; in 2018 NAf. 248 million and in 2019 NAf. 209 million. Finance Minister Richard Gibson provided the information as he gave an insight into Government’s current finances during an urgent meeting of the Central Committee of Parliament on Monday.
Gibson said that up to yesterday, Monday, Government had a total of NAf. 35,787,000 in its current account and NAf. 20,100,250 in deposits for total liquid funds of NAf. 55,887,000.
Additionally, Government has NAf. 11,232,528 deposited with the Central Bank of Curaçao and St. Maarten (CBCS), the remaining funds from 2014 that regarded investments. Also in the Central Bank, Government had deposited NAf. 21,700,000, which represents capital investments that were approved in 2017.
St. Maarten had also received an inheritance settlement from the former Netherlands Antilles (NA), and an amount of NAf. 27,453,685 remains after payment was made to the Pension Fund. The total amount in investment funds available at the Central Bank is NAf. 60,386,213. Together with the current account monies St. Maarten has in the bank and its deposits, the available liquidity amounts to NAf. 116,273,513.
Gibson said information on the budget depletion for the first and second quarters of 2017 had been provided to Parliament already. As it relates to the third quarter ending October 31, because of Hurricane Irma in September, and given the damage sustained, Government is unable to present or provide this report currently.
Under normal circumstances, Government has six weeks after the end of a quarter to present and provide a report as it relates to depletion of the budget. “Given the state of affairs that we are in now, I think we will have a delay in being able to present the third quarter depletion budget,” he told MPs.
On the issue of financial reserves, Gibson said, the country has zero equity, as there are “no free financial reserves,” other than the equity of the country, which consists of immovable and movable property and other assets.
He said the financial commitments the country has for the remainder of the year are the same as have been included in the 2017 budget as expenditures and did not decrease, but rather increased as a result of Hurricane Irma.
“The same commitments as outlined in the budget 2017 are the commitments [that remain – Ed.] and in addition thereto, the relief obligations or relief payments that we have and will continue until the end of this month. In the amended budget that we [Council of Ministers – Ed.] have approved, which is presently at the Council of Advice for their reaction, we have included what we think to be the expected shortfalls for 2017.”
He said the country had originally estimated to receive a total income of NAf. 478,101,671 in 2017. The expectation after Irma is estimated to be NAf. 351,397,912 – a difference of NAf. 126,703,759.
Expenses for 2017 were set at NAf. 458,101,671. Government had realised a surplus of NAf. 12 million by the end of August. Government anticipates NAf. 50 million in additional expenses this year that had not been projected and not budgeted for as a result of Irma. Gibson said the net shortfall for 2017 would be NAf. 144,803,759. He said the expected deficit in 2017 would be NAf. 146 million; in 2018 NAf. 248 million and in 2019 NAf. 209 million.
St. Maarten had six months of normal operation prior to Irma, hence the reason the projected deficit for 2017 is smaller than 2018 and 2019.
“We had surplus of NAf. 12 million up to the end of August and Irma came and destroyed the projected income for September, October, November and December – four months revenue for this year has been affected, but for 2018, that same revenue stream will be affected all year long and that will give you insight into why we should expect the deficit in 2018 to be substantially higher than in 2017. In 2019, we expect the deficits to start dropping,” he said.
Following Gibson’s presentation on the country’s finances, several MPs asked questions and sought clarification on matters.
The questions included whether taxes are being paid since hurricane Irma and what the income is so far; whether Government has any plans to address the projected deficits; what is the contribution of Government-owned companies and when persons who assisted in the cleaning of the country after the hurricane will be paid, amongst others.
After the first round of questioning, the meeting was adjourned to Wednesday, to give the Minister a chance to prepare the answers.