St. Maarten Government, Cft agree to finish 2012 budget this year

POSTED: 05/19/11 12:26 PM

St. Maarten – The Council of Ministers and the Board of Financial Supervision (Cft) have agreed that the budget for 2012 must be finalized before the year ends. The agreement was made during the Cft’s two day visit to the island that ended on Wednesday.

According to Cft Chairman Hans Weitenberg both parties agree that preparing and finalizing the 2012 budget must not follow the same course as the 2010 and 2011 budgets, which were not approved until well into the year they were drafted for.

“We agree that a budget cannot have the effects it should have, if it is approved during the year it should be implemented,” Weitenberg said.

The Cft also took time to review the procedure that led to the approval of an amended version of the 2011 budget. The government was presented with the Council of Advice’s report on that adapted budget Friday and is preparing its response, which will then be sent to Parliament for review.

“The St. Maarten Parliament was not happy with the way things went, because they thought their work was over when they approved the budget, but we told them that the government did not take care of our advice and so we could not give a positive advice,” Weitenberg said.

The Cft Chairman said he also pointed out that the organization is prepared to hear the government’s reasons for not applying their advice and that if the arguments were strong enough the Cft will allow the government to pursue its course. On the other hand if the arguments are not well substantiated the Cft takes the course of informing the Kingdom Council of Ministers that the budget does not meet the norms and standards as established in the Kingdom Law Financial Supervision for Curacao and St. Maarten.

“We use the most objective forecasts and one of those is the economic growth forecast of the Central Bank and they have predicted that growth will only slightly increase or will be flat this year, so we told the government that it cannot start from the higher side of things like they wanted to,” Weitenberg said.

Alberto Romero, the Cft member nominated by Curacao added, “If we look at the preliminary income reports we’ve seen the revenue from the first quarter of 2011 is basically the same as that of the first quarter of 2010, so you already see no major growth. If however during the period after that, there is some growth and it yields additional revenue then the government can create an amendment and we will look at that when it comes to us.”

One example of where government did not substantiate its case well enough was the projected revenue. When the Cft applied the economic growth projection it got a potential take in of 420 million guilders. If the government had fully concluded certain other arrangements, like the purchase of shares in government owned companies formerly owned by the Netherlands Antilles, the Cft would have been willing to go along, but they couldn’t because the process had not been “fully, legally completed.”

 

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