Opinion: Troubled budget

POSTED: 01/22/15 11:13 PM

The central committee of parliament will meet on Thursday to discuss the draft 2015 budget. There is trouble in the air, because the cabinet sticks to its 445 million-budget, despite the advice from financial supervisor Cft to reduce it to 226 million guilders.

Right now, there is no way of knowing whether Finance Minister Martin Hassink has reached an agreement with the Cft, because questions we posed last week – amongst others about the dividend policy related to the budget, went unanswered, because the minister thought it not prudent to answer them.

Fact of the matter is that state revenue over the past three years have hovered around that 226 million guilders so presenting a 445 million guilders budget requires lots if wishful thinking.

It is true that the economy is out if its slump – it is performing actually more than reasonable. There are however a couple of thorny problems: while the economy grows, tax revenue remains flat.

One could argue that there two things do not go together very well. If businesses are doing better, the government should be cashing more tax guilders. That this is not happening must be due to a malfunctioning tax inspectorate.

Another issue is the solution for the accumulated debts. That’s right: the government has been posting so-called balanced budget ever since the country became autonomous, but in the real world the deficits have piled up year after year.

The Cft demands that the government compensates these deficits in the 2015 budget – and St. Maarten has presented a creative solution that was, last time we heard about it, not acceptable to the Cft.

Are we then heading to a new confrontation and a new instruction from the kingdom council of ministers? The 445-million budget smells like trouble.

Based on historical data it is way too optimistic. What is the point of doing this, while – in the unlikely case tax revenue is suddenly higher than projected this year – it is simply possible with the blessings of the Cft to adjust the budget upwards in the course of the year?

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