Government seeks help to clear debts

POSTED: 11/1/12 11:56 AM

St. Maarten – The Finance Ministry plans to approach the board for financial supervision Cft and Holland to help solve its shortfalls in the 2013 budget. Finance Minister Roland Tuitt called the old debts on Wednesday a “sticky item.”
“These were some old debts that crept up and we are looking for solutions,” Tuitt said.

The debts relate to shortages over the last two years which the minister estimated at 30 million guilders for each year. He plans to propose close to a five year period for clearing the arrears.
“The solution to this process is that we will negotiate with the Cft and Holland to see if we can get a process approved to spread the debts across a longer period of maybe 5 years or so. That will be a more feasible solution than to try to get rid of those debts in the budget of 2013. We are talking about close to 60 million guilders just for that.”
The government also has other debts to contend with which may not be cleared unless they are able to garner more revenue through for instance the turnover tax. One major debt lies with Social Insurance Bank, SZV, which has to be paid for the insurance for family coverage.
“If we collect what was budgeted we will not have a deficit. The only way we can have a book deficit is because of the amount of money that has to be paid for the insurance of the families. That is why we are looking at abolishing that law and coming up with a new structure for the insurance that is planned to be implemented next year,” Tuitt explained.

The National Health Insurance is expected to be implemented in January. The government is currently recalculating the total cost of the scheme to test its feasibility. Once the figures correlate with an earlier calculation, then Tuitt anticipates that it will come on stream in 2013.

If the calculations turn out to be “too negative,” Tuitt said that the National Health Insurance plan will be shifted to 2014.

“An amount that was budgeted was not collected. That is the reason why those two years closed off with a deficit. Right now in the year 2012 we are close to where we are supposed to be. If things happen in the United States they might have a negative consequence on the tourism coming to the island but if things remain reasonable, the way they are going, we should meet the 434 million guilders that we are expecting to collect this year,” Tuitt said.
The 2011 Financial Statements are also expected to be submitted to Cft today. The finance ministry had asked for a two month extension after the initial deadline set while presenting the draft 2013 budget one month beyond its original deadline.

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