Parliament debates draft 2013 budget – Minister Tuitt: “GPD-growth sends message of hope”

POSTED: 04/16/13 1:34 PM

St. Maarten – The plenary parliament meeting about the 2013 draft budget started with a more than five-hour delay yesterday morning, after President Rodolphe Samuel adjourned to give MPs the opportunity to study information they had received at the last moment and to attend a funeral.

The meeting was scheduled to start at 10 a.m. but it got only underway well after 3 p.m. with presentations by the cabinet members. While viewer-interest on the internet spiked at 77 when Finance Minister Tuitt took the floor, the interest quickly dropped when other ministers spoke to less than a quarter of that number.

Tuitt gave a general overview and underlined that the budget, like any budget, is based on estimates of both revenue and expenditures. “Adjustments will become necessary as new information becomes available or when the parameters change,” he said. “It is a work in progress.”

The minister repeated that the budget is one that “repairs and corrects things of the past.”

In 2012 the government did not take out any loans; for this year, 150 million guilders in loans are expected, though the budget projects only 115 million.

Last year St. Maarten’s gross domestic product showed 1.2 percent growth, mainly due to the performance of hotels and restaurants.”This growth-trend sends a message of hope and prosperity,” Tuitt said, adding that recent reports about the Caribbean region point to the risk of a new economic downturn. “It is important to remain vigilant,” he said.

Prime Minister Sarah Wescot-Williams, who is also the Minister of General Affairs, noted in her presentation that St. Maarten is not the only country in the region to grapple with presenting its budget on time. “This is what happens in small island countries,” she said, adding that country-status is “a learning experience.”

While the budget complies with the rules laid down in the Kingdom law financial supervision and the financial supervisor Cft has given the draft the nod of approval, the Prime Minister indicated that St. Maarten is not there yet: “I do not believe that we are on solid ground yet with our finances.”

Wescot-Williams commended MPs Frans Richardson and Johan Leonard with their initiative-law to ban the use of plastic grocery bags. “But even with the law in place we need everybody’s cooperation,” she said. “The government spends huge amounts on keeping the island clean, but we cannot do this alone.”

The PM referred to a once upon a time initiative of former Commissioner Mike Ferrier to put up billboards reminding citizens to keep the island clean and that is was not uncommon for people to dump their garbage right near such billboards.

Wescot-Williams acknowledged the need to create an environment for job creation. “It is easy to bring in foreign investors. We get proposals a dime a dozen every day, but if something is too good to be true it usually is. For investors it is all about ROI – their return on investment. There are no free lunches.”

The PM defended the government’s initiative to ask transparency international to conduct a national integrity system assessment. She added that cabinet members are taking part in the integrity-program of her ministry. “With Transparency International we get a renowned company to assess how we deal with corruption. We want to use that assessment to align our own activities.”

Wescot-Williams also addressed the situation with the new government building/ and explained that after the building was delivered by developer RGM the project hit a snag because the fire-department came up with stricter safety requirements that caused a delay because there were no funds to finance the necessary adjustments. Only in 2012 the government managed to put together 3.5 million guilders for the work that was delayed three years earlier. Currently a 1.5 million guilders settlement with contractors is awaiting the budget-approval. To finish the building requires 18 million, a parking garage is going to cost 10 million, and the completion of the additional building called Block D 11 million. Buying our developer RGM requires 14 million, the PM said.

Vromi-Minister William Marlin announced that his ministry has found a creative way to help starters in the housing market: they are able to rent from the housing foundation with intent to buy. The rent of the first three years will go towards their down payment on a mortgage. After the three years, the rent payments will turn into mortgage installments.

Marlin also touched on the problems the housing foundation has with delinquent tenants. “Some of them have $9,000 rent arrears, and there are tenants that move in and become delinquent after a couple of years. That has not been managed well in the past. We cannot say to tenants with arrears, it is okay, this is from the government. This is a serious issue.”

Minister Marlin said that the process to select a company for the construction of a waste-to-energy plant on Pond Island should be concluded in July or August. Initially nine companies were invited to submit a proposal, and five companies did. “We have decided to invite all five for the next round in May,” Marlin said. “From there, two or three will go to the next round. We will select the two best proposals and then start negotiations and select one.”

The company that wins the bid will finance the investment that runs according to Marlin into the tens of millions of dollars, and will get a concession to operate the facility. “The plant will generate between 8 and 10 Megawatt of electricity that will be sold to Gebe. The landfill will be cleaned up and yield a clean piece of real estate on Pond Island.”

Marlin repeated that talks have been held with the Cadastre about a shift in fees. “Procedures that are not for profit (like the transfer of property within a family) are not seen equal to real estate transactions,” the minister said. Legislation is in the works to give the government a say in the approval of Cadastre-fees in the future.

 

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