Cft reaction to first quarter budget report expected soonPOSTED: 05/23/12 1:28 PM
St. Maarten – The board for financial supervision confirmed yesterday that it received a progress report from former Finance Minister Hiro Shigemoto about the first quarter of the 2012 budget. The minister stated in a press release issued last weekend that the government does not foresee a budget deficit, “due to the increased income for the first quarter and due to under-spending.”
Cft-secretary Cees van Nieuwamerongen confirmed yesterday that he received the report. “We are studying it at the moment,” he said, adding that for the moment he had no comment on the report’s content. “Our reaction will be ready pretty soon, in the next couple of days,’ he said.
This newspaper calculated that Shigemoto could leave behind a budget with a deficit as high as 39 million guilders. This is based on three factors. The first one is the failure to collect rental taxes from foreign condo owners. The 2012 budget projects 21 million guilders revenue from this source, but the Cft noted in its letter of May 9 to the government of St. Maarten that so far “close to zero percent” of this amount will be collected this year. The amount mentioned is a measly 23,621 guilders.
The second factor concerned Shigemoto’s promise to pay civil servants the cost of living adjustment for 2010. This will cost the state 17 million guilders, but according to the Cft there is no coverage for this amount.
The third factor is the parliament’s decision to take the collection of death duties out of the 2012 budget. This will cost the state another 1 million guilders in lost revenue.
Shigemoto said last week at a press conference that the ministries had under-spent their budgets in the first quarter by 13 million guilders. He also noted that, based on the 123 million guilders revenue in the first quarter, annual state revenue could be as high as 490 million guilders – 54 million above the budgeted revenue of 432 million.
But the first quarter revenue and the first quarter under-spending say nothing about the totals at the end of the year. Traditionally, revenue drops during the low season, and with the change of government, spending could very well go up.
Another problem with Shigemoto’s projections is that they are based on unaudited figures and that it is therefore unknown whether the first quarter revenue has really been collected. It is also unclear whether the under-spending the former minister announced reflects reality.