Social minimum to be introduced on islands

~ Dutch Govt. responds to evaluation report ~
THE HAGUE–A social minimum tied to the legal minimum wage, potentially more exemptions to the general spending tax ABB, concrete incentives to stimulate investments and employment in Bonaire, St. Eustatius and Saba, and a more direct role of the National Government Representative.

The Dutch Government came with a formal reaction to the Caribbean Netherlands constitutional evaluation report, presented in October last year, on Thursday. The response to this report, which was critical of the role of The Hague in the execution of the new public entity status of the three islands, was long awaited.
The evaluation committee, chaired by former Minister Liesbeth Spies, concluded that real progress had been made in the areas of education and public health since the islands became part of the Netherlands on October 10, 2010, but at the same time noted that many local residents were very disappointed about the standard of living.    
That is why the Dutch Government has proposed a series of specific measures to fight poverty and to stimulate the social-economic development which will be executed aside from the individual agreements that are already in place with the islands, many of which are secured in the local Multi-Annual Programme.
In the 10-page letter that Dutch Minister of Home Affairs and Kingdom Relations Ronald Plasterk sent to the Dutch Parliament on Thursday, it was stated that the Dutch Government was aware of the local circumstances of the Caribbean Netherlands residents, and therefore opted for a specific input to realise improvement.
“The Cabinet, the Netherlands feels connected with the people of these three islands in the Caribbean. No matter how different, we share aside from the constitutional relation a common history, we have family and personal ties, jointly maintain social, cultural and economic relations. The cabinet sees real possibilities, based on this report, to give further content to the connection, together with the Governments and people of the three islands,” Plasterk stated.
To improve the standard of living of the most vulnerable groups, the cabinet intends to determine a social minimum derived from the legal minimum wage. This step that the Dutch Government did not want to take before had been asked by the islands multiple times. The social welfare (“onderstand”) will gradually increase towards this social minimum. The timeframe for this increase still has to be set.
The Cabinet has decided to further expand the special social welfare (“bijzondere onderstand”) for certain groups in society. The Cabinet is willing to look into possibilities to reduce the height of the employer’s premiums, which now amount to 18.4 per cent. This will result in a reduction of the cost of doing business on the islands which will have a positive effect on the economic development.
ABB tax
Incentives will be looked at within the current fiscal system to stimulate investments and employment by, among other things, the premium obligation of small entrepreneurs and the elimination of the so-called integration levy in the ABB tax which will reduce construction cost.
The cabinet is considering an expansion of exemptions of the ABB, for example for water and electricity, and the reduction of the tax burden on social cultural organisations. The package with measures will be incorporated in a law proposal which ideally will go into effect per January 1, 2017.
The cabinet agreed that the possibilities for economic growth have to be optimally used in order to alleviate poverty. The findings of the cost of doing business assessments carried out on the islands will serve as pointers, as well as the bottlenecks that were indicated by the islands such as the high transport cost between St. Maarten and Saba, St. Eustatius, the access to national subsidies, and the cost and availability of utilities services.
Expertise will be made available to deal with issues such as competition and consumer protection. However, there are restrictions to influence the high consumer prices based on international prices, it was alluded. Improvement of the spending power is not only a responsibility of the Dutch Government, but requires a joint effort of Governments, the private sector, institutions and residents on both sides of the ocean, stated Plasterk.
Work opportunities
Measures are needed to increase the opportunities for the local people on the labour market. Existing initiatives to stimulate the link between education and labour market will be expanded, including a broader application of the training regulation when issuing a work permit. Employers will be emphatically reminded of their responsibility to offer local workers an opportunity. The mediation process to secure employment will be professionalised.
The cabinet acknowledged that the high cost of housing is a problem for lower income groups. Social housing will be invested in, and the support for the local housing foundations will be continued. Attention will be given to the expansion and improvement of the existing social housing on the islands. This should result in the construction of more affordable homes.
The maintenance of the physical infrastructure is an important source of concern on all three islands. Additional means for investments in the infrastructure have been incorporated in the Multi-Annual Programmes.
The Ministry of Infrastructure and Environment will support the islands with expertise to maintain the existing infrastructure. The Committee for Financial Supervision CFT will be asked to take the expenditures for infrastructure into consideration when assessing the islands’ budgets.           
In consultation with the local Governments, the governmental apparatus will be strengthened in order to realise better, more efficient service to the people and private sector. The Ministry of Home Affairs and Kingdom Relations BZK, in cooperation with other Ministries, municipalities and other organisations in the Netherlands, will make capacity available to support the islands’ Government administrations. Specific attention will be given to the “vulnerabilities” at the Census Offices.
Upfront position
In response to the finding of the Caribbean Netherlands Evaluation Committee regarding the “fragmented and occasional contradicting approach” by the Dutch Government, it has been agreed that National Government Representative (“Rijksvertegenwoordiger”) Gilbert Isabella will assume a more upfront position on behalf of the Dutch Government.
Isabella will see to the implementation of the Multi-Annual Programmes, promote cooperation among Dutch civil servants working on the islands and cooperation of these civil servants with public entities. Civil servants of the Dutch Ministries will assist the National Government Representative. Bilateral talks with the islands will be held twice per year.
The islands will be granted more time to implement Dutch laws and regulations, while some legislation dating back to the Netherlands Antilles will remain applicable. The absorption capacity of the islands will be taken into consideration in the process of taking legislative measures. “Reluctance is in order,” stated Plasterk in his letter.            
In concluding, the Minister stated that the Dutch Government agreed with the evaluation committee that the feelings of disappointment also have to do with the big differences in language, culture and Government between the Netherlands and the islands.
“Being part of the Netherlands also means that Dutch companies and organisations consider Bonaire, St. Eustatius and Saba as part of the Netherlands. That is why the Cabinet will make an effort to involve the Dutch Government in the broad sense, municipalities, schools, housing corporations, banks, utility companies and the private sector in the enhancing of the possibilities that the direct ties of the islands with the Netherlands offers,” stated Plasterk.
On June 6, the Permanent Committee for Kingdom Relations of the Second Chamber of the Dutch Parliament will have a debate with Plasterk on the Caribbean Netherlands evaluation. The debate in the First Chamber will take place on June 21.  

Source: Daily Herald
Social minimum to be introduced on islands