Philipsburg:--- Commissioner of finance Xavier Blackman at a press conference on Thursday said he and the leader of government William Marlin has held a number of meetings both on Curacao and the Netherlands including the CFT as they try to convince their partners that the island needs more time to be able to make its financially sustainable. Blackman said they are busy with a number of trajectories, which is aimed at bridging the gap that currently exists. Blackman said his main message to those he met including the CFT is that St. Maarten needs to have an interim period on which it can balance its budget.
The commissioner said the budgets that were presented in the past by the former government were not balanced when compared to the annual accounts.
Reviewing the overview Blackman said the annual accounts for the year 2000 the annual account was in the negative of 29.2 million guilders, 2002 the deficit was 22.6 million guilders, while in 2003 the deficit stood at 19.2 million. Blackman said even though a balance budget was presented when the annual accounts were made up it showed it was negative.
The commissioner said that St. Maarten is not the only island that has this trend, since the exact same thing happens of the other islands and it is not a unique thing for the Netherlands. He said this shows that it is extremely difficult under the current constellation to have a really balance budget. He said the CFT, forced the island except for the BES to present a balance budget based on the rules of financial supervision.
He said he already made it clear that it is actually impossible for the islands to meet these requirements, which larger countries are not able to do without loans.
In the case of St. Maarten the island is not able to borrow but that is made possible in the rules of the financial supervision, however, based on the stipulations the island cannot borrow enough monies to fully accomplish its missions.
The finance commissioner said the current conditions where the island is preparing itself to take on more tasks and with the global crisis, it is impossible for any government to balance its budget from one year to the next. He said the discussions held on this matter were rather open and frank discussions where the issues were presented so that long-term solutions can be found.
Blackman said the island government would be preparing a document where these issues would be outlined and how government intends to deal with them with their partners. The idea he said is for the island to bridge that gap and to be more financially strong but most importantly to be able to keep its revenue locally. One of the requests made to the Netherlands is to help the island come up with solutions that would deal with the situation within the present constellation and the framework of the financial supervision law.
Blackman said the island government has requested from the CFT and extension of the deadline for the budget of 2010, which was granted. Blackman said the executive council has taken a decision based on the ongoing talks to present a realistic budget with real figures and allow the CFT to deal with the reality of the island’s financial situation.
The commissioner said though they are still trying to cut costs and to see how far down they can bring the deficit, which stands at 50 million. He said that even their other partners are struggling to produce a balance budget and while the government of St. Maarten has chosen a realistic approach, it is not the end of the road. He said the Kingdom partners are willing to discuss this matter now that they are seeing the reality of the matter. Even though they probably had the best of intentions when putting together the law on financial supervision but it is, clear to them that is almost impossible for anyone to fully comply.
Government Concern about Debt Cancellation
Blackman said the government is very much concerned about the debt cancellation. He said the Netherlands has agreed to pay off all debts incurred until December 31 2005. The finance commissioner said they are faced with some challenges getting the figures from their creditors.
The commissioner said he also held discussions with the SOAB who is busy making an overview, which would be sent to the Netherlands for verification, he said the CFT was also requested to see if they are able to assist with the accumulation of the figures, since the process is taking too long something that is a detriment to the island since the island government are still paying the debts.
TAX DEPARTMENT UPGRADE
A kick off session was held not long ago for the tax department and a project leader for the department was appointed who would oversee the process. At that kickoff session, it was agreed that a draft plan of action for all the trajectories including the cleaning up of the backlog be prepared. This plan of action was made up by the project leader that was recently appointed.
Blackman said the Minister of Finance has also agreed and has pledged her support for the cleaning up of the tax department and getting the department up to par. He said a protocol is being worked upon which would regulate the cooperation between the federal receiver’s office and the island receiver’s office. This protocol would also deal with the cooperation between the island and federal government where it concerns the tax department. The idea is for St. Maarten to participate in improving the department.
The island government is also working on a new fiscal framework for country St. Maarten. He said some of the documentation was prepared in the past, which are now being scrutinized and adjusted if needed. One of the focuses would be to take the island’s specifications in consideration while making sure the system that is created would be one that is easy to manage. The idea also would be to make sure that the spread of the tax burden is fair, which would mean all entities would pay their fair share so they can adequately contribute to the economy. The tax system has to also foster and encourage economic growth, which has to be in place in the framework or system. St. Maarten is also working along with Curacao who just recently created a new tax system.