Approved budget amendment now awaiting advice from Cft

POSTED: 09/16/13 12:07 PM

GREAT BAY – St. Maarten is not out of the woods yet after the parliament approved the amendment to the 2013 budget on Thursday evening. Ratification of the ordinance by finance Minister Maarten Hassink and Governor Drs. Eugène Holiday should not be a stumbling block, but after that the amendment still needs an advice from financial supervisor Cft.

A spokeswoman for the Cft in St. Maarten said that, once the office has received the ratified ordinance, it has by law two weeks to issue its advice. “We do not approve or disapprove, we give an advice, positive or negative,” she said.

The timeframe theoretically allows for a scenario whereby the parliament has approved the amendment, and the minister and the governor have ratified it, but whereby the Kingdom Council of Ministers has to decide about an instruction for St. Maarten without an advice from the Cft.

The Kingdom Council of Ministers meets next week Friday to discuss St. Maarten’s financial situation. Focal point is the question whether or not to give the country an instruction to balance its budget.

“That is indeed possible,” the spokeswoman said yesterday. “But I think there will be contacts before next Friday.”

Finance Minister Hassink will anyway be in touch with Kingdom Relations Minister Ronald Plasterk by Monday to brief him about the latest developments. Hassink has expressed his dissatisfaction with the Cft over its demand to substantiate the measures the parliament now has approved to balance the budget.

Hassink’s irritation stems from the fact that the financial supervisor earlier approved the 2013 budget from the previous government, while the underlying legislation to make revenue-generating measures possible was lacking. In the end this budget proved to have a $30 million deficit because the intended measures could not be executed.

The Council of Advice issued an advice on the amendment on September 2. Like the Cft later, the council remarked that quite some changes require substantiation or at least further explanation. The council also pointed out that the amendment did not take the multi-annual budget into account. This must by law also be balanced.

In a reaction, Minister Hassink and General Affairs Minister Wescot-Williams wrote to Governor Holiday that “adjusting the multi-annual 2013 budget would be merely an exercise on paper” and that the cabinet had decided not to go through this process. At the same time, the cabinet acknowledged that the amendment does have an effect on the multi-annual budget. “The government considers it more important to prevent the arrears that have occurred for the year 2013 as much as possible for the coming budget year. For this reason all available time and energy is completely focused on processing the corrections that are being proposed now in the draft 2014 budget and the accompanying multi-annual budget.”

The Cft noted in its advice dated August 5 – so almost a month before the Council of Advice produced its view on the amendment – that it had “a positive impression” of the efforts to correct the 2013. At the same time, the Cft demanded “a thorough financial substantiation.” Because the finance ministry needed more time to put this information together, the financial supervisor wrote: “Concrete the Cft is at this moment not able to approve a number of the selected income-increasing and expenditure-lowering measures.”

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