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Hassink: Country operating in financial ‘crisis management’

Source: The Daily Herald 10 Dec 2014 06:22 AM

PHILIPSBURG--"We are operating in a crisis management situation," Finance Minister Martin Hassink said in describing the country's financial situation to Members of Parliament (MPs) when he outlined the government's earnings and expenditures for the first three quarters of 2014 in a meeting of the Central Committee of Parliament on Tuesday. The meeting will continue on Friday.

Government expenses are growing while its income has shrunk in some areas and stayed flat in others in spite of the economic growth forecast by the Central Bank of Curaçao and St. Maarten (CBCS).

The stagnation of income can be seen in the collection of turnover tax (ToT) over the years. NAf. 113.9 million was paid in ToT for January to October 2012, NAf. 118.6 million for the same period in 2013, and NAf. 118.2 million for this year.

The financial situation soon will lead to an amendment to the 2014 budget.

The first two quarters of the year saw "reasonable" collection of taxes and payment of expenditures. However, the third quarter income started to slip.

Hassink said government "did not expect" revenues "to drop as it did." Personnel expenses have increased steadily "more than budgeted" and are becoming "unaffordably high."

Possible increases to the General Pension Funds APS premiums also threaten to increase personnel cost. The premium currently stands at 22 per cent of earnings. This has been the level since the days of the Netherlands Antilles, although the estimate had put the percentage at 25. A recent study by APS is said to put the premium at 28 per cent.

Total taxes collected in the third quarter of this year amount to NAf. 271.1 million compared to NAf. 260.4 million for the same period last year.

Although income is low from July to November (the season pattern), development for the same period this year is "worrisome." The Tax Administration is analysing the drop in wage tax for August.

Those factors have "consequences for liquidity and payment of arrears" of government and require a "more structural" approached.

Calls by the Committee for Financial Supervision CFT to decrease the 2015 budget total of NAf. 445 million are being looked at by the Financial Ministry. The draft budget is already considered a "skeleton" and further cutting can affect government's operations "negatively," according to Hassink.

The meeting was suspended until Friday due to a break in the live television broadcast, as well as to give Hassink sufficient time to gather data to answer questions from MPs George Pantophlet, Silveria Jacobs and Christophe Emmanuel (National Alliance), Leona Marlin-Romeo (independent) and Sarah Wescot-Williams (Democratic Party).

The MPs questioned the minister on pending payment for social premiums, "ghost workers" in government, plans to stimulate the economy, outstanding concession payment by St. Maarten Harbour Group of Companies, measures to increase tax compliance and the purchase of Mary's Fancy Estate by APS.

George Pantophlet mentioned 1 time
Leona Marlin-Romeo mentioned 1 time
Sarah Wescot-Williams mentioned 1 time
Silveria Jacobs mentioned 1 time

Democratic Party [DP] mentioned 1 time
National Alliance [NA] mentioned 1 time Corner Stone Solutions NV