SXMElections.com

~ Narrows in on finances, govt-owned companies ~

PHILIPSBURG--The St. Maarten Hospitality and Trade Association (SHTA) has issued a statement welcoming new Prime Minister Marcel Gumbs and the newly appointed ministers, amidst what it says has been a time of widespread lack of trust in St. Maarten's unstable government. The largest business representative on the island has taken notice of the increased discussion of late – both in and out of the media – about the instability of the Dutchside's government and the damage it is doing to the economy.

"The lack of trust in our current governing system has led to a widespread belief that transparency and integrity are seriously lacking. According to our recollection, we have not had a continuous government, despite periods with the same prime minister, for the past six years; on average, a new government has been sworn in each year. Is it any wonder investors are all sitting on the fence or seeking clearer water?" the association questioned.

"Let's start with taking the example of the release of the alleged financial statements of the [St. Maarten – Ed.] Harbour Group of Companies [SHGC – Ed.]. The SHTA does not agree with how these statements were presented, which in and of itself is a breach of integrity. Nevertheless, we hereby request that all of the other government-owned companies [all 11 of them – Ed.] comply with the law and make their financial statements available to the general public with detailed disclosures including those of related party transactions.

"Let us all call on our shareholder representatives to insist that those managing the people's patrimony are making the best decisions for the shareholders, not their strategic partners. This should not be something to be hidden – full disclosure should give confidence, not a cause for concern," SHTA expressed.

"In essence, the shareholder representatives and the Managing Boards must work to ensure that all issues of transparency and full disclosure are addressed, erasing misperception and improving clarity.

"All queried subjects in the leaked financials are not necessarily incorrect, but because of the entities heightened responsibility to the people, both its management and Managing Board should be held even more accountable to eliminate questions of impropriety while always making the best decision for the shareholder."

SHTA says that although it may seem like the Harbour is "taking it directly on the chin," upon closer inspection, many government-owned entities are riddled with the same issues: the Housing Foundation crisis, cost of GEBE utilities crippling local businesses and keeping potential investors away, and communications companies barely being able to provide basic services.

"It may even be said in recent retrospect that St. Maarten's government-owned companies are almost in disregard where it comes to corporate governance, integrity and transparency requirements.

"We believe that all publicly owned government entities, as well as our government, have a duty and obligation to publicly issue their financial statements in a timely and complete manner," keeping in mind that they "represent a significant public financial asset, some two to three times the size of the entire public sector budget.

"To exclude them from analysis of St. Maarten's overall financial situation and determining the country's compliance with requirements of a solid budget as stated in the Kingdom Law on Financial Supervision is absurd."

Regarding the state of government finances, SHTA says it was disappointed to learn from Professor Age Bakker during his presentation to SHTA members on December 4, that government revenue has remained stagnant at some NAf. 420 million.

"As we listened to Minister [of Finance Martinus – Ed.] Hassink's presentation to Parliament on the state of our finances, we grew more and more depressed. Indeed what has been the cost of all this instability and increasing tax burden on the back of the private sector?

"If government's revenue has remained flat even after a two per cent increase in turnover tax (ToT), what is the point of continuing with the five per cent ToT? In our view, the law of diminishing returns is in full effect and SHTA has stated many times the ToT legislation is extremely destructive and should be repealed immediately. The biggest effect of the 'temporary' increase was to strengthen the grey economy and to give an added advantage to competitors operating outside of our jurisdiction, i.e, not local employers.

"The new Gumbs Cabinet certainly has its hands full. To the extent we can help get the ball rolling, the SHTA has compiled its top 10 wish list for the New Year:

1. Government stability – a government that does what it says it will do – with clearly defined programmes, policies and objectives;

2. An increase in tax compliance on those operating outside the law, so that the tax basis can be broadened;

3. Financial transparency, accountability and customer service at all levels of the public sector;

4. Repealing of the ToT legislation;

5. Swift functioning jurisprudence and application of existing laws;

6. A functioning funded tourism authority, with proper and accurate and statistics of main economic pillars cruise, stay-over and marine tourism;

7. The modernisation and flexibalisation of labour laws;

8. Improved infrastructure and essential public works such as sewage, management of Great Salt Pond, sidewalks and garbage disposal;

9. An overhaul of education systems to create synergy that will match the future employment needs of the island;

10. and improved environmental management via sustainable developments.

"Our future starts now. Happy New Year!" the organisation concluded.