Lively political debate on Laser 101: Connor (UP) estimates gray economy to be 50 percent

POSTED: 08/19/14 11:32 PM

St. Maarten – “The government has a debt of 500 million guilders to the Netherlands, and 200 million to creditors. The 2015 budget is expected to be around 465 million. Unemployment is 11.5 percent. It is your first day in office. What will you do?”

This is how moderator Glen Carty started the political debate on radio station Laser 101 on Saturday evening with participants Emil Lee (number 4-candidate Democratic Party), George Pantophlet (number 2-candidate National Alliance), Claret Connor (number 10-candidate United People’s Party) and Harlec Doran (number 6-candidate United Sint Maarten Party).

The lively debate outshone earlier debates on AVS and the political mixer at the St. Maarten Hospitality and Trade association (SHTA) because there was more interaction between the moderator and the participating politicians.

Emil Lee, recovered from his 34-miles blooper at the AVS-debate – a mistake he has made light of by paying a visit to Shawn York, founder of 37 Square Miles Tee shirts for a picture and one of those tee shirts – was the first to answer: ‘Everything boils down to money. The economy has to start performing properly; the past two years we have seen growth but it is not anywhere near where it ought to be.”

Lee said that only the period from Christmas until Easter is profitable for prime tourism businesses like hotels, car rentals, and restaurants. Stretching the season will improve the economy. The DP-candidate further pointed to the importance of fiscal discipline, but also to the payment-discipline of the government: “The government is the biggest spender on the island, but the private sector is unsure when they will be paid.”

When Carty brought up that the 175 million of the national budget is spent on personnel costs, Harlec Doran, a human resources manager at the TelEm Group of Companies, said that the government has to become more efficient. “There are a lot of contracted companies and consultants that add to these costs. We have to see how we can reduce the overhead.”

The participants in the debate did not always react to the question or remarks moderator Cary put to them. An example is his remark that St. Maarten has almost one Member of Parliament per square mile, asking whether the country’s organization is top-heavy.

“Hindsight is always 20/20,” Claret Connor said. “I don’t think this will be an issue after the elections. It is not about 465 million versus 175 million. It is about the position St. Maarten is in and how we can build on that. It is about the level of the services the government provides, not about what we pay in personnel costs.”

On the issue of increasing state revenue, George Pantophlet went back to the days when the National Alliance was in government. “Our finance Minister Roland Tuitt had an agreement with the casino owners that they would pay 3 million.” He also referred to the tax deal with the American University of the Caribbean.

Claret Connor noted that increasing revenue is all about how the government deals with buy valium london these issues. “There is a number out there about the gray economy, that is stands at 28 percent (of gross domestic product – ed,) , but according to me it is closer to 50 percent.”

Emil Lee said that the government has to look at all costs and at phenomena like ghost workers. “We have to show that the government does everything within its power to control costs. My intuition says that there is room for improvement.” Lee said that the private sector is losing in the job market to the government, because it is unable to beat its salaries.

George Pantophlet noted that it would be difficult to cut back staff, before switching off-topic to the plight of workers in the private sector: “Seventy percent of employees are earning minimum wage, some even less. We have to break this cycle.”

Harlec Doran called for incentives for small businesses and improved government services, noting that obtaining for instance a vending license is “cumbersome.”

When Carty introduced the topic of tax compliance into the debate, Lee said that this should not be all that complicated. “Put a sign at every building site with information about the building permit, the contractor, and so on. That will make it easier to control sites that do not have such a sign.”

Lee also suggested the introduction of a national ID-number for all citizens to enable cross-referencing data from different departments.

Carty noted that the debaters did not offer a lot of practical solutions. “It remains vague,” he said.

Caret Connor: “Parties have not been able to address compliance. Go and have a look at Western Union and see how much money is leaving the country. How is it possible that people who do not have a job are still able to send money back home?” Connor also referred to so-called briefcase-entrepreneurs who visit St. Maarten to sell their merchandise, and then disappear quickly to escape the taxman, and to condo-owners who rent out their properties below the fiscal radar.

Changing the tax-system to increase compliance is not easy, according to the debaters. Doran supports the introduction of a value added tax to replace the turnover tax, while Lee sees a phased introduction of a new system that is in tune with the fiscal system on the French side of the island.

“”You cannot change this overnight,” Connor interjected, to which Carty reacted by saying that the discussion about simplifying the tax system has been going on at least since 2011. He noted that when he was president of the Chamber of Commerce, the Chamber went along with the increase of the turnover tax from 3 to 5 percent on the condition that this would be temporary.

“Let’s not kid ourselves,” Connor said. “It is not simple.”

George Pantophlet noted that “legislation can only pass when eight MPs agree,” though he did not say that, in spite of all the talk about revamping the tax system, no proposal was ever presented in Parliament since 10-10-10 to take action in this department.

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