New deadline for pension and healthcare reform
GREAT BAY – Financial supervisor Cft is cautiously optimistic about the way things are going with the country’s finances, it appeared from a press conference the Cft hosted yesterday afternoon at the Convent Building on Front Street.
There are however still a few major hurdles the government has to take before the kingdom government is fully satisfied with the measures it has taken after the 2015 instruction. They concern the reform of the pension and healthcare system. For both topics, the Cft has advised the kingdom government to grant St. Maarten a new deadline – until the end of this year.
Cft gives St. Maarten until the end of this year
The retirement age has to go up to 65 otherwise the pension system is not sustainable, Cft-chairman age Bakker said. Whether the government is going to do this in one step, or gradually, Bakker did not know.
He noted however that the government had made progress on both topics.
“Healthcare reform is complicated; this has to be done very carefully,” Bakker said.
The Cft has also taken note of the disastrous situation at the Postal services. “Every year business is going down by 10 percent,” Bakker said. The Cft has advised to write a new business plan for the Postal Services. The government had already hired former Justice Minister Dennis Richardson to reorganize the company. Downsizing the payroll is part of his assignment. The Postal Services currently employ 34 people.
The Cft spoke during the past couple of days with Governor Drs. Eugene Holiday, Minister of Finance Richard Gibson, Public health Minister Emil Lee, the Council of Ministers, pension fund APS and the Postal Services. Yesterday afternoon the Cft met in a closed door meeting with Members of Parliament’s finance committee. The meeting with Parliament took longer than expected. “They had a lot of questions,” Bakker said without going into details.
The Cft has advised the kingdom Council of Ministers that St. Maarten can borrow for capital investments, but this year not beyond 30 million guilders. “The original capital budget was larger but this is not doable,” Bakker said.
The financial supervisor wants more insight in investment plans and proposed capital expenditures; that is a prerequisite for Cft to review future loan requests. The Cft reiterated its concerns about the large component of incidental income in the approved 2017 budget and has urged the government to come with measures to increase structural income.
The 2016 budget, based on the fourth quarterly report, shows a surplus of 26.4 million guilders, 1.1 million higher than budgeted, the Cft notes. “A significant amount of income, including a one-off payment by Gebe, was realized in the fourth quarter to make up for shortfalls earlier in the year,” the Cft said. “The surplus will largely be used to settle outstanding arrears.”
