THURSDAY, 11 JULY 2013
~ Budget deficit reduced, sent to CFT ~
PHILIPSBURG–Government has proposed some five new revenue generating measures to increase its income level.
Finance Minister Martin Hassink declined to divulge details of the measures during Wednesday’s Council of Ministers press briefing. He said, however, that the measures would not affect the tax burden of the individual and is not associated with the Turnover or wage taxes. The revenue generating initiatives were “tapping into sources that are there and need to be opened up.”
The new measures should have a minimal negative effect on the tax burden on people and the measures should also be conservative. The proposed measures were discussed with the Council of Ministers on Tuesday and they gave their blessings to the measures. Hassink said the proposals will be sent to the board of the Committee for Financial Supervision (CFT) to see whether they will support them.
He stressed that while CFT only advises on the budget, a negative advice means that the Governor would not sign off on the budget. He said the CFT looks at the budget from a technical perspective and looks at issues such as whether it is balanced, if interest norms are being complied with etc. The minister is hoping to have an approved budget by August.
He promised to give more details in two weeks. Government has also managed to cut between NAf. 30 to NAf. 35 million from the 2013 budget and added some NAf. 16 million taking the total amount from NAf. 457 million to NAf. 440 million. He said there was a “general cut” that affected all ministries and some specific cuts.
Hassink said it is very important that the budget is approved as soon as possible. He has been working on the budget cuts over the last few weeks to fix the “considerable” budget deficit.
According to Hassink the original budget contained income sources that could not be realized either because legislation was not in place or can’t be implemented in time to realise the income that was budgeted. His first task was to remove these income sources from the budget completely. This amounted to between NAf. 30 – NAf. 35 million guilders.
Government also based its estimates for 2013 on the realization of the expenses in 2012 and the first quarter of 2013. “The fact that we don’t have a budget for 2013 means that automatically by law, the budget of 2012 is in effect. That budget has a considerably lower expense level than 2013. That means that automatically the procedures are in place to have a lower realization in 2013,” said Hassink. “So based on that we can determine new estimates for the expense level of 2013 in the final budget.”
Plans are also in the pipeline to start working on the 2014 budget. The minister says if next year’s budget is not on time, government will face the same issues as they do today with the 2013 budget. The emphasis is to get the 2014 budget ready early. He said the process has already started with the various Secretary-Generals being informed. The official kick off meeting will be held on Monday with the comptroller. He is hoping to have the process completed before the end of the current year as not having the budget approved “is not a workable situation.”
On a related issue Hassink said he also presented the financial statements of 2011 to the Council, which he said is a complicated document that required the council some time to study it. It is expected to be approved in the Council of Ministers meeting next week.
He said the quarterly financial reports are crucial for the management of the country and for government, Secretaries-General, and Comptrollers to make proper decisions.
Source: The Daily Herald, St. Maarten