Opinion: Tough measures

POSTED: 08/15/13 12:59 PM

That the country is in dire financial straits is no secret and it makes the job for a minister of finance challenging, to say the least.

The 2013 budget is still a big pain in the sense that the necessary amendments still have not been approved by the parliament. The draft is currently at the Council of Advice, but what exactly the content is, nobody knows. Well, except for the finance minister and some of his staff and members of the Council of Advice of course.

With the financial supervisor Cft constantly breathing down the government’s neck it is a challenge to present a balanced budget – one that is good enough to stand the Cft-test.

Minister Hassink intends to present an overview of the financial situation in other countries in the region. The objective of this exercise is of course to show how well St. Maarten is doing compared to its neighbors. Taking a look at Aruba’s budget and the country’s huge national debt alone would boost the morale of any finance minister that has to deal with St. Maarten’s situation.

But comparing St. Maarten to others does nothing g to improve our financial household. Of course the Netherlands has a deficit that is way beyond the 3 percent standard for European countries. The United States has a budget deficit. Actually, it is hard to find a country anywhere in the world that does not have a budget deficit.

Minister Hassink made it sound like yesterday as if the Netherlands had imposed financial supervision on St. Maarten. That is of course not correct: St. Maarten agreed with the condition of financial supervision and the condition that its budgets ought to be balanced. St. Maarten wanted to obtain country status and these were some of the conditions. Did our successive governments bend over backwards and did they give in to anything and everything for the sole purpose of becoming an autonomous country? We don’t think so.

St. Maarten negotiated with the Dutch and it played hardball at times. The results of the negotiations seem more palatable to St. Maarten than to its Dutch counterparts that do not miss a single opportunity to complain about everything they consider being wrong in the Friendly Country.

We have asked the question how reasonable it is to demand that St. Maarten has a balanced budget more than once in the past. The question seemed reasonable given the fact that most countries in the world, including the Netherlands, don’t have a balanced budget.

Here is the thing though. Accepting a budget deficit may sound attractive (it would somehow sideline the Cft) but in the long term it does not benefit the citizens of our country. A budget deficit is a debt. Everybody knows what happens if you spend more money than you earn. You have to go to then bank for a loan, pay through your nose and at the end of the day you are still short, unless you manage to change your spending habits and get your budget under control.

If you don’t achieve this, your children will one day end up with a negative inheritance: debts only and not a penny for the grandchildren.

The argument that countries are unable to go bankrupt is of course an illusion. When debts go through the roof, countries have to rethink their spending. Money will become more expensive, investors will go elsewhere, the job market falls apart and government services will deteriorate.

To prevent such a disastrous scenario a balanced budget – or something as close to it as possible – is the best guarantee that our children and grandchildren will also have a future.

We do need a civil service to run the country, but how much are we prepared – or able – to pay for that apparatus? The discussion about cost of living adjustments for civil servant-salaries rears its ugly head every year – or maybe we ought to write all year long.

The government has announced on more than one occasion that this system is not sustainable. Salaries gobble up more than 40 percent of the national budget and the civil service is with 1,800 personnel not even at its desired operational strength.

Sooner or later somebody will have to make some painful choices or come up with extremely creative solutions. In this context, the study into the core tasks of the government is a good beginning, but it will take six months to complete the study and after that god knows how long to decide what needs to be done with the results.

In the meantime the salary-train rumbles on, gobbling up tax payers money like there is no tomorrow – until we reach the point where there literally is no tomorrow anymore.

Do we really want to wait until we reach that point of no return? Or do we want to take some harsh measures now to secure our children’s future?

What will happen is so predictable that it is actually sad. By the time the core task study comes to its scheduled conclusion in April of next year the country will be in full election-mode, which politician is going to announce the measures that must be taken at such a moment?

We figure that such politicians do not exist. The elections will come first, and the tough measures will come later. But that they will come is a given.


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