PHILIPSBURG – Finance Minister Perry Geerlings criticized the Kingdom for interfering in St. Maarten’s affairs by attaching conditions to the provision of badly needed liquidity support but at the same time he made clear that that support is not forthcoming if members of parliament do not agree with a 10 percent salary cut.
Geerlings made his remarks on Tuesday during the first public meeting of Parliament about the 2019 budget. The meeting was later adjourned until the government provides the parliament with a notice of amendment to the budget – a process that could take two to three weeks.
“The government does not understand the political pressure from The Netherlands to make changes to our budget as an autonomous country within the Kingdom,” Geerlings said. “This is just because they believe we should adhere to their way of thinking.”
Referring to Kingdom Relations State Secretary Raymond Knops’ demands (that include a mandatory salary cut for parliamentarians), Geerlings said that this interference constitutes “a breach of our autonomy.”
The Kingdom Council of Ministers demands that St. Maarten limits its expenditures in 2019 to 475 million guilders. Necessary expenditures topped at around 490 million, but cost cutting measures brought it down again to around 483 million. Financial supervisor Cft had previously agreed to a budget of 478.8 million guilders.
“If the level of expenditures stays at 483 million, Geerlings said, “I expect an instruction for further cost cutting measures before the budget is accepted.”
Government and parliament seem to have little choice in these matters. “We are depending on loans from the Netherlands to execute the budget and to keep the government apparatus functioning,” Geerlings said.
The current budget deficit for 2019 is around 71 million guilders. The finance ministry has already toned down its capital investment budget from 132 to 93 million. It has dropped half of the 800,000 guilders investment in a meeting room for the Council of Ministers and relies for the financing of a new tax inspectorate building on the World Bank trust fund. St. Maarten will be allowed to attract loans for a maximum of 40 million.
Geerlings emphasized once more that upgrading the tax inspectorate remains a priority. St. Maarten collects 20.7 percent of Gross Domestic Product (GDP) in tax revenue, while the average in surrounding Caribbean countries is 27 percent.
“We do not intend to increase taxes, we want to broaden the tax base,” Geerlings said. He noted that the informal economy also has a negative impact on government revenue.
