Netherlands Vs Former Antilles

Dutch Sint Maarten’s Debt Increased To 1.2 BILLION In Fourth Quarter: Austerity Measures Taking Effect

The debt position of the Country of Sint Maarten increased in the fourth quarter of 2020 by 61 million guilders to 1,232 million (over 1.2 billion). This brings the government debt ratio to 67 percent of the gross domestic product (GDP).
The debt of the Sint Maarten public sector is estimated at 936 million and the debt ratio of the public sector at 51 percent of GDP. The calculation of the debt ratios is based on a GDP of Sint Maarten – the total size of the economy – of 1,835 million (over 1.8 billion). The Implementation Report up to and including the fourth quarter shows a provisional budget deficit of 197 million. This deficit is lower than budgeted (263 million), mainly due to slightly higher tax revenues (than budgeted), lower personnel costs and lower costs for goods and services. Incidentally, the deficit of the government of Sint Maarten is higher than the maximum deficit allowed by the Council of Ministers (RMR) for the time being (of 186 million). This is evident from the most recent letter from the Financial Supervision Council (Cft). The Cft received the fourth Implementation Report 2020 on 19 February. In accordance with the Financial Supervision Act (Rft), the Cft receives the report no later than six weeks after the end of each quarter. The fourth quarter report should have been submitted no later than February 11, so “was submitted with a delay.” In response to the global corona crisis, Sint Maarten also had to take drastic measures. Additional liquidity was required for the support measures. In 2020, partly on the basis of advice from the Cft, the RMR provided for the additional liquidity need by means of four tranches with a total size of 175 million guilders. That amount of 175 million is relatively high when we consider the total tax revenues that Sint Maarten itself generates. They amounted to some 350 million in 2019, while in connection with the corona crisis, 279 million was budgeted in 2020 and 288 million was ultimately raised. The Dutch contribution is more than half, namely almost 61 percent, of what Sint Maarten residents themselves generated in taxes. The total income according to the Implementation Report for the fourth quarter of 2020 amounted to 355 million (including license fees, fees and concessions and other income) compared to 434 million in total income in the year 2019. On the other hand, total expenses of 552 million last year (was 462 million in 2019). The biggest difference between the two years is the 85 million in Covid-19 contributions, of which 30 million are mandatory but not yet spent at the end of December. The official personnel costs have been slightly reduced by the Country of Sint Maarten to 194 million (217 million had been budgeted for 2020 and 200 million in 2019). There are also lower costs on the item goods and services of 33 million compared to the budget. The under-spending of the expenses is mainly explained by various projects not completed and lower costs for maintenance, marketing and hiring, ”writes the Cft. As an explanation, Sint Maarten indicates that this is a result of the corona crisis. The lower than budgeted personnel costs are divided into lower salary costs of 16 million and lower pension premiums of 7 million. Sint Maarten indicates that the burden for salaries is lower as a result of budgeted vacancies that have not been filled. The costs of pension contributions are lower as a result of the amendment of the pension legislation for civil servants as of 1 July 2020 and because the remuneration is lower than budgeted. “In this context, the Cft points out once again that the political authorities on Sint Maarten do not pay any pension contributions at all, just as they do not pay any contributions or personal contributions for their medical expenses.” The Cft asks Minister Ardwell Irion of Finance “to resolve this as soon as possible”.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.