Opinion: Ignoring reality

POSTED: 05/18/12 1:52 PM

Finance Minister Hiro Shigemoto bade his farewell to politics with a statement about the country’s financial condition on Wednesday that basically ignored reality.
That reality is obviously that there is a hole in the 2012 budget that seems to be beyond repair. Yet, the departing minister did not spend a single word on the devastating letter the government received last week from the financial supervisor Cft.
Instead of addressing the country’s real problems, Shigemoto paraded St. Maarten’s bank balances in front of the nation, boasting that the current account stood 90 percent higher than it did a year ago.
He also noted that state revenue is 13.9 percent higher than budgeted up to March, conveniently forgetting that revenue usually drops dramatically during the low season and that this surplus will most likely disappear like the proverbial snow before the tropical sun.
Shigemoto also proudly announced that the ministries have been under spending their budgets during the first quarter. But this statement is based on unaudited figures, and as history has shown many times over, such statements are not worth a lot.
The people of St. Maarten are therefore left with a presentation that does not even tell half the story.
The 2012 budget has a hole of 39 million guilders, we wrote in our Wednesday-edition, but when we spoke with experts outside the government building they told us that the actual situation is probably even worse.
It is true that we did not account for the pensions that have to be paid to the outgoing ministers who remain unemployed after their departure. The discussion is not about whether these ministers are entitled to that money – existing legislation leaves no room for misunderstanding on this point – but the discussion ought to be about how St. Maarten will adjust its budget to pay this money.
So yeah, the 2012 budget is in dire straits, even though Finance Minister Shigemoto painted a rosy picture of a very precarious situation. We truly wonder why the minister did not come up with an explanation for the practically zero percent the country will collect from foreign condo owners in taxes this year, while the budget projects 21 million guilders in revenue from that corner.
How ridiculous is it to send out almost 1,800 tax returns to more than 400 targeted condo-owners and end up with nothing? It shows once and for all that this so-called solution to balance the 2012 budget was primarily based on wishful thinking.
The worst thing is that we suspect everybody – ministers and Members of Parliament alike – new this deep down to be the case. It seems therefore that this revenue was put on the budget to satisfy the financial supervisor Cft. Amazingly that worked for a bit, since the Cft gave this shaky budget the nod of approval, but now that reality has kicked in, it is time to make some real adjustments.
Of course, that won’t be Shigemoto’s headache anymore. Knowing the island’s financial history of the past two decades, we truly wonder whether one day somebody will finally manage to get this right.

Did you like this? Share it:
Opinion: Ignoring reality by

Comments are closed.