THE HAGUE–St. Maarten has no excuse to deviate from the financial supervision law. The 2013 budget has to be balanced and fixed soon. If St. Maarten doesn’t comply, the Kingdom Government might very well intervene.
That is the word from Dutch Minister of Home Affairs and Kingdom Relations Ronald Plasterk in response to written questions by Member of the Second Chamber of the Dutch Parliament André Bosman of the liberal democratic VVD party.
Bosman sought clarity from Plasterk on August 22, after taking note of the front page article in The Daily Herald of August 15 in which St. Maarten’s Finance Minister Martin Hassink stated that realising a zero-deficit budget was a “mission impossible.” Bosman wanted Plasterk’s opinion on Hassink’s statement that a budget deficit of two or three per cent was more feasible.
“I don’t agree with that. The Netherlands took over an important part of St. Maarten’s debt and arrear payments on October 10, 2010. It was agreed at that time that St. Maarten would stick to a number of norms that were secured in the consensus Law on Financial Supervision. The Committee for Financial Supervision CFT supervises that these norms are lived up to,” stated Plasterk.
He clarified that there had to be a balanced budget. No loans are to be taken for consumptive expenditures. Loans can be taken to finance investments, but the total interest charges of these loans may not exceed the interest expense standard. “The Kingdom Law has to be complied with unabridged to prevent similar financial problems from before October 10, 2010.”
Referring to Bosman’s request to have the 2013 budget put in order as soon as possible in compliance with the CFT’s requirements, Plasterk noted that indeed the 2013 budget had been compiled much too late and that the CFT’s advices on the draft budget had not been incorporated for long.
Plasterk warned that ignoring the advices of CFT ultimately could result in a request from the same CFT to the Kingdom Council of Ministers to give an instruction. “This means that the advices of CFT are significant and have to be followed,” stated the minister, adding that the planned revenue-generating measures had not been implemented by the previous St. Maarten government.
“In the meantime, a new government has been appointed which up to now hasn’t managed to get things in order,” stated Plasterk. The original positive advice of CFT on the earlier draft budget is no longer current. CFT has updated its advices and has not rendered a positive advice on the budget amendment because a number of substantiations are missing.
As for Bosman’s question who carries the ultimate responsibility in case St. Maarten doesn’t get its finances in order, Plasterk stated that St. Maarten carried that responsibility. “That responsibility cannot be abdicated on others,” stated the minister, adding that he shared CFT’s concerns on “lacking timeliness of drafting and approving of budgets, budget amendments and annual accounts.”
Plasterk also responded to Bosman’s call for active intervention by the Kingdom Government to force St. Maarten into realising a balanced budget. He said CFT might request an instruction based on article 14 of the Financial Supervision law if St. Maarten failed to come with an approved budget.
The instruction might extend to approving the budget within a reasonable term and to send this to CFT. That is a task of St. Maarten’s Parliament, Plasterk said. “The Kingdom can intervene in case neglect of finances of a country within the Kingdom leads to a situation where good governance no longer can be guaranteed,” the minister warned.
Source: The Daily Herald, St. Maarten