Minister Hassink wants financial flexibility “Zero budget deficit is a mission impossible”

POSTED: 08/15/13 12:55 PM

St. Maarten – Finance Minister Maarten Hassink will put St. Maarten’s financial position into perspective when he makes his presentation to the parliament about the amendment to the 2013 budget. September 2 has been set as a tentative date for this meeting.

“The deficit is expressed in a percentage of gross domestic product,” the minister said yesterday morning at the weekly Council of Ministers press briefing. “That ratio will give a good idea of how countries are doing.”

Hassink referred to the news that the budget deficit of the Netherlands will be close to 4 percent this year, 1 percent about the limit European member states have agreed upon. “And still they are pressing us to have a balanced budget,” he said. “I am not against balancing the budget. If you don’t you put the burden on your children and your grandchildren. But we are building up a country and we need some flexibility.”

With this statement the minister suggested that a limited deficit ought to be acceptable. “If we were allowed to have a 1 percent deficit it would be manageable and even with a 2 percent deficit we would have no problem. But a zero percent deficit – that may be a mission impossible.”

Minister Hassink pointed to the increase in expenditures over the last three years – from 400 million guilders in 2011, to 420 in 2012 and to 440 million this year. “That increase in expenditures will cause problems,” he noted.

To combat further increases, Hassink wants to look critically at the core tasks of the government. “We have to make sure that we are not doing things that we are not supposed to be doing,” he said. A study into the core tasks is expected to begin within the next couple of weeks and to be completed in six months. Results are therefore expected sometime in April of next year.

Hassink is also studying revenue-streams. “It is important that everyone contributes,” he said. “Government-owned companies now pay a concession fee – and some don’t. We are working on a dividend-policy. Government-owned companies have to pay their taxes and also a concession fee or dividends.”

The 2013 budget is currently at the Council of Advice. “The process is taking a lot of time. That is unfortunate because this situation is hampering us. We must have the 2014 budget ready by the end of the year – that is currently more important than the amendment to the 2013 budget.”

Hassink said that government revenue for the first six months of the year stood at 227 million guilders. Based on historic data revenue in the first half of a year is traditionally higher than that in the second half. “If we are lucky we will be able to balance the budget,” Hassink opined.

The deadline for submitting the 21014 budget to the financial supervisor Cft is October 15. “That budget will contain measures that require legislation and those laws won’t be ready by January 1, 2014, but rather halfway through next year,” the minister said.

Hassink is in the process of merging the tax office and the receiver’s office into one fiscal unit. “Before the end of the year we will have one customer friendly tax office,” he said. “We want happy clients and I strongly believe that once we achieve this 50 percent of the compliance problems will be solved.”

 

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