Emilio Wilson Estate loan requires budget amendment

POSTED: 05/9/14 10:37 AM

Cft: 2015 budget “more or less on track”

St. Maarten – The government still has some work to do before it will have its funding to purchase the Emilio Wilson Estate. This appeared from a press conference where the board for financial supervision (Cft) gave an update on the state of the country’s 2014 budget.

Finance Minister Martin Hassink will have to present a budget amendment to the Parliament, this has to be approved and then signed off for approval by the governor before the Cft is able to give an advice on this 30 million guilders loan.

Cft-chairman Prof. Age Bakker remained non-committal when asked how this loan would fit in the country’s capital expenditures budget. St. Maarten asked the Cft in March approval for loans up to 88.7 million guilders, but the financial supervisor considered this unrealistic and capped the investment program for 2014 at 60 million. When St. Maarten wants approval for the 30-million guilders loan to finance the Emilio Wilson Estate purchase, the total in loans for this year would increase to 90 million. Bakker did not say beforehand whether the Cft would turn down such a request.

At the press conference, the Ct presented Hyden Gittens as the successor of Max Pandt as its member for the BES-islands.

Yesterday morning the Cft met with Acting Governor Reinold Groeneveldt, Finance Minister Martin Hassink, the complete Council of Ministers and the Parliament’s financial committee. The main topics of discussion were the execution of the 2014 budget, sustainability in public borrowing and public financial management.

Bakker said that the 2014 budget is “more or less on course” but that it will be a challenge to present the 2015 budget by September 1. This deadline falls on the Monday after the August 29 elections.

So far, state revenue is about 3 million guilders above budget and not all budgeted expenditures have been realized. Bakker said that the 2013 budget has closed with a 20 million guilders deficit. “This will have to be compensated either through a surplus in the 2014 budget, a budget amendment or otherwise in the 2015 budget,” the Cft chairman said.

The main challenge for the 2015 budget will be to find solutions for the country’s payment arrears to pension fund APS and to social health care insurer SZV. St. Maarten owes 62 million guilders to APS and 113 million guilders to SZV.

While the Cft is not in the business of telling the government how to tackle these issues, Bakker said that financing the completion of the new government building via APS will probably offer an opportunity to settle the arrears with the pension fund. For SZV, at least part of the solution could come from using the fund’s surpluses to settle the balance.

Within the approved loans for up to 60 million guilders, 40 million is reserved for finishing the new government administration building. In April, the Cft also approved loans to the tune of 43.5 million for investments St. Maarten paid in 2011 and 2012 out of its reserves; however, these loans must be used to improve the country’s seriously weakened liquidity position.

The year 2015 is important, because this is when financial supervision will be evaluated. Bakker said that this ought to become the subject of a public debate. “We are a bit hesitant to take part in it, because the Cft itself will also be evaluated. Of course, we think that we are doing a good job,” he said only half-joking.

Asked what the sentiment in the government is towards the continued existence of the Cft, Bakker said carefully, “There is a sense that some sort of financial supervision will be beneficial.”

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