SXMElections.com

PHILIPSBURG--The Committee for Financial Supervision CFT “in all likelihood will ask for a targeted instruction” to be handed down by the Dutch Kingdom Council of Ministers if government does not settle its arrears with Social and Health Insurance SZV and the General Pension Fund APS.

Government has missed the May 30 deadline set by CFT to settle its arrears with SZV and APS. The targeted instruction will focus on dealing with the payment arrears amounting to some NAf. 189 million down from the disputed NAf. 295 million.

An agreement is said to be close between the social funds and government, said CFT Chairman of the Committee for Financial Supervision CFT Age Bakker. Bakker hopes that Government can settle its arrears by the end of August.

Government would have received a letter on Thursday evening from CFT outlining what must be done to clear up the matter and avoid the possibility of a targeted instruction. Government will have a week to respond to the recommendations. If a resolution is not met on the arrears, CFT will then proceed to the Kingdom Council with an advice for the targeted instruction.

If the request for the targeted advice is rendered by the CFT to the Kingdom Council, it will be the third time an instruction has been formulated for St. Maarten. The two previous advices were given by CFT, but were never implemented, because the situation they sought to regulate was remedied by St. Maarten by the time the Kingdom Council was ready to issue the instructions.

The pending, but seemingly close resolution of the division of assets and liabilities of the former Netherlands Antilles among the Netherlands, St. Maarten and Curaçao “may benefit” St. Maarten’s bottom line significantly, said Bakker. The funds coming to the country can be used to settle its arrears. This would be very helpful for the country which has been given by CFT, via the agreement with the Kingdom Council of Ministers, until 2018 to service its arrears.

Parliament has a significant role to play in improving the country’s financial position by passing the multi-annual budget and attending to the law amendment to increase the pension age from 60 to 62, said Bakker. That change has been pending for more than a year now.

“I have asked Parliament to take its responsibility,” he said.

The country’s pension system continues to be too expensive. APS needs to increase its premiums “tremendously” to cope, but that would inevitably lead to labour becoming “too expensive” on St. Maarten, said Bakker. This was not the first time the CFT chairman has pointed out that the pension and health care system have become heavy burdens for the country.

“The working people are footing the bill [now– Ed.], but there may be nothing for them [later– Ed.], he said.

If these issues are settled soon via reform, the systems will become “viable” for the country in the long run.

Bakker reiterated CFT’s call to government to seek ways to raise its income and to cut cost as a way to out the country in a better financial situation. Government is “working on a strategy for growth.”

The CFT members also discussed the preparations for the presentation of the 2016 Budget with Hassink. They urged government to work to get it passed this year, rather than in the new year, like the handling of the 2015 Budget.

The CFT last visited St. Maarten in February. At that time, the board had pointed out to government that its tally for the 2015 Budget of NAf. 445 million needed more elaboration, especially related to the garnering of sufficient income and how it planned to deal with the mounting debt to the social funds – Social and Health Insurance SZV and the General Pension Fund SZV. The budget was given a provisional approval for CFT with no room for the borrowing of money on the capital market.

Government is “growing” and so is its income, said Bakker. This is due to government “making progress” in getting money from its companies.

Government’s income projects for the year had increased by some NAf. 1 million in April, bringing the total to between NAf. 446 million and NAf. 447 million, according to Bakker. No budget amendment has yet been tabled by government.

Bakker, however, cautioned that CFT has seen increase in revenue in past years only to dip due to seasonal patterns. That pattern accounts for the seasonal nature of St. Maarten’s one-pillar tourism economy.

Government-owned companies are in “a strong position … they should help out more,” he said.

The CFT board met with Prime Minister Marcel Gumbs and Finance Minister Martin Hassink on Wednesday for a working dinner. Talks continued on Thursday with separate meetings held with Governor Eugene Holiday, Hassink and Parliament’s Finance Committee).

An informal meeting was to be held with the Social Economic Council SER, primarily about tax reform, on Thursday evening.