THURSDAY, 15 AUGUST 2013
~ To make presentation to Parliament ~
PHILIPSBURG–Realising a budget with a zero deficit at this time of the year would be “mission impossible,” says Finance Minister Martin Hassink.
Hassink said that while he was “not against” balancing budgets, as this meant putting fewer burdens on the government organisation, it was important to give a country in a building phase like St. Maarten “some flexibility.”
He said if St. Maarten were allowed to have a two per cent budget deficit, the country would not have had a problem with its original budget. He said even a one per cent deficit “would be manageable for us, as we would be able to deal with it, but at this moment, in the middle of the year 2013, to organise [and – Ed.] still realise a budget of zero per cent is a mission impossible.”
He said even the Netherlands was facing a budget deficit of some four per cent, while St. Maarten had to have one of zero per cent. However, he said the government of St. Maarten would do its utmost.
“What is very important is that we as a country control our expenses. In 2011, the total expense level was about 400 million. That’s according to the financial statements presented. The 2012 statement is not ready yet, but indications are that it will be at a level of 420 million. That’s a five per cent increase and ultimately for 2013, if approved, it will be about 440 million, which is a little less than a five per cent increase.
“Continuing with an increase like this in a budget [means – Ed.] your economic growth is not that high. It will cost in the future, so we really have to take measures to control cost.”
The Minister said the government organisation had to be assessed to determine what the core tasks were to ensure that “we are not doing things that we should not be doing and then generate expenses that are not necessary.”
Hassink is a strong proponent of government-owned companies contributing to the government coffers by paying concession fees and dividends. He said some companies paid these fees, but some did not. “I think there should be some regulation that all government companies pay dividends or concession fees at this moment.”
He also said government should also look at the operations of the government-owned companies to ensure that expenses were being controlled.
The reported income of government up to the end of June stood at NAf. 227 million, while expenses stood at NAf. 210 million. The amount projected for the second half of the year is expected to be lower, given the country’s seasonal economy. “But ultimately, I believe we can balance the 2013 budget. Maybe with a short small deficit, but if we are lucky, then we balance and even with a small surplus,” he said.
The Minister will be giving a presentation to Parliament on budgets and budget deficits on September 2. He told reporters at Wednesday’s Council of Ministers press briefing that he would speak about budget deficits of the countries in the region and how St. Maarten fits into these scenarios, among other things.
He said budget deficits normally were expressed in percentage of gross domestic product (GDP). “That’s a good way to compare. Even if a country is much bigger, that ratio gives a good idea of how each country is doing.”
Regarding the issue of the 2013 budget, Hassink said this was currently at the Advisory Council. He said a “mix of [revenue-generating – Ed.] proposals” was included. Government is still seeking support for these with hard evidence that they will be feasible, so they can receive the nod of approval from the Advisory Council, Parliament and the Committee for Financial Supervision CFT. He declined to divulge details of the revenue-generating measures.
“This process takes a lot of time for us. Unfortunately, I had hoped we could spend that time on the 2014 budget. It’s basically the situation that is hampering us,” he said.
Hassink noted that government was trying to break this cycle by being timely with the 2014 budget. A deadline of October 15 has been set to finalise the 2014 budget.
Government has “very little” time to work on the 2014 budget, because if any measures in the budget require law changes, these might not be ready in time for January 1, 2014.
“It makes it difficult for 2013 to balance a budget and we have stressed that to the board of CFT – to take those things into account – because you cannot hold a county to a rule that exists, but that ultimately is not working in your favour or just working against you.”
Source: The Daily Herald, St. Maarten