Financial supervisor concerned about liquidity-position: Cft warns for 13 million deficit in 2013 budget

POSTED: 12/11/13 6:57 PM

St. Maarten – The 2013 budget could close with a 13 million guilders ($7.25 million) deficit. This appears from a letter from financial supervisor Cft to Finance Minister Martin Hassink.

Cft-chairman Prof. Dr. Age Bakker reacts with the letter to St. Maarten’s third execution report for the year 2013. The parliament approved the 2013 budget in September; the budget was balanced at 440 million guilders, but the estimated revenue and expenditures projection in the execution report is 423 million. “It is the opinion of the Ct that there is a reasonable chance for a deficit, considering the lagging revenue realizations up to October as reported by the Receiver of St. Maarten,” Bakker states in the letter, dated December 3. “Based on these figures the Cft projects that revenue for 2013 will be 210 million guilders. With projected expenditures of 423 million this results in a deficit.”

The Cft urges Minister Hassink to limit the risk of a deficit as much as possible by taking decisive action with the measures that are mentioned in the execution report. These measure entail a stop on contracting new obligations, a vacancy stop and a restructuring of income-transfers.

According to the Cft, the execution report “confirms once more the impression that the liquidity-position is deteriorating structurally.” The report explains this from the inability to contract loans, but the Cft wonders: We are unable to conclude from the report whether this is the only reason for the deteriorating situation.”

Prof. Bakker adds that the Cft has serious concerns about the deteriorating liquidity-position and advises the minister “to map the structural causes of the liquidity-process and to write a long-term plan for the sustainable improvement of the liquidity-position.”

In spite of these critical remarks, the Cft also offered some encouragement to St. Maarten. “There is progress on contents in this execution report. It contains more analysis, an overview of payment arrears, and an end-of-the-year prognosis.”

On the other hand, prof. Bakker notes, the report also contains inconsistencies in the figures and in the text. “The revenue figures are not consistent with the report from the Receiver. “The Cft advises therefore to check the report on these points before publishing it.”

Did you like this? Share it:
Financial supervisor concerned about liquidity-position: Cft warns for 13 million deficit in 2013 budget by

Comments are closed.