Budget amendment targets reserves and casino fees

POSTED: 09/12/13 11:39 AM

Cft wants more information about proposals

St. Maarten – Amid lots of “political warfare” as opposition MP Louie Laveist expressed it, the Central Committee yesterday dealt with Finance Minister Hassink’s amendment to the 2013 budget.

The proposed amendment lowers the budget from 457.9 to 440.3 million guilders, based on downward adjusted income of 33.2 million and upward projected revenue of 15.7 million guilders.

The financial supervisor Cft however, acknowledges in its reaction to the amendment dated August 5, that the amendment is based on a “cautious scenario” as far as the projected additional revenue is concerned. Still: “The Cft has serious doubts whether all measures are realistic given the stage these measures are at right now and the fact that we are already in August as far as the execution is concerned. There is no further substantiation of the mentioned agreements available and that is reason why we are unable to fully agree. The same goes for the proposed measures to lower expenses.”

The revenue generating measures include a payment of 5.6 million guilders from the reserves of Gebe’s water company, 2.5 million guilders for making a terrain available for fuel tanks, 3.5 million in payments from the reserves of the Bureau Telecommunication and Post, 2.1 million guilders in arrears in casino fees, and 3.8 million from tax settlements.

The Cft had in August still doubts about the feasibility of the proposed measures and basically asked the finance ministry to provide further information. The ministry is currently working on putting the requested information together.

The Cft also questioned the cost cutting measure to abolish the government’s contribution to the AVBZ-fund, because this is a legal obligation “that cannot be abolished just like that via a mutual agreement.” According to the Cft this requires an adjustment to existing law that cannot be implemented retroactively. The same goes for the proposal to cut the government’s contribution for the co-assurance of family members in half to 7.5 million guilders.

Gebe has made a counter proposal to paying money from it reserves; it suggests paying off three years in concession fees for 15 million guilders.

Finance Minister Hassink said that the amendments to the 2013 budget he proposes are not dramatic. “Actually we should be sitting here discussing the 2014 budget,” he said.

After the Cft issued a negative advice on the budget the parliament approved in April, the Council of Ministers immediately ordered a complete stop on the hiring of personnel and a stop on purchases and obligations.

Minister Hassink said that work on legislation to abolish the contribution to the AVBZ-fund per January 1 of next year. “This fund is self-supporting and there is no reason for the government to contribute to it,” he said.

Tax compliance and broadening the tax base are two issues that are getting a lot of attention, Hassink said. While the Finance Ministry is responsible for around 90 percent of government revenue, the minister pointed out that different ministries have income on the street that they could tap into with some effort.

Subsidized entities will feel the heat from the government as well. Hassink” The accountability of subsidized entities has to improve. They have to provide financial statements and if they don’t do that I am going to stop paying their subsidies in September. Subsidy requests for 2014 have to be in before the end of October, otherwise they will be taken out of the budget.”

The Minister said later in the meeting that dragged on until close to 3 p.m., that he had received a “package” from Kingdom Relations Minister Ronald Plasterk to which answers are expected by Monday, September 16. Four days later, the Kingdom Council of Ministers will take a decision about an instruction.

Opposition MPs asked for more time to study the documents Minister Hassink presented to the committee. In the end, the meeting was adjourned until this morning at 10 a.m., but not after opposition and coalition MPs had vented their opinions. While NA-MP Laveist needed more time, DP-MP Roy Marlin said that it had taken him just an hour to peruse the documents and that everything was perfectly clear to him.

Marlin said that he had his doubts about the sustainability of the 2013 budget when he voted in favor of it in April. “I am also to blame for voting for the 2013 budget,” he said. “But the last thing I will do is sit back and let others filibuster so that in the end we will get an instruction from the Kingdom.”

Marlin warned that the Kingdom is free to determine the content of an instruction and that it could order the governor to execute it.

On the opposition end of parliament, MP Laveist posed that “the Prime Minister has the ultimate responsibility for the budget” and that “this is not the responsibility of the former Minister of Finance.”

DP-MP Leroy de Weever attacked the budget the parliament approved in April, saying it is clear that it had holes in it and that was based on ludicrous assumptions and for which no legislation was in place. In particular, MP De Weever made a point of the increased excise on fuel the parliament approved in April. “The governor sent this budget back, because it was inconsistent, it was a dream of a budget. This budget is going to be passed because it is traditional that those rather than sitting and debating the budget. “The past modus operandi has been to walk out on the budget. I expect the same dance of the beat.”

De Weever said that the previous budget became absolute unrealistic and that the projection of expected revenue on taxes had been “absolutely asinine.”

The meeting will continue this morning at 10 a.m.

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