PHILIPSBURG--The adjustments to the 2011 country budget were approved by the Council of Ministers in an extraordinary meeting on Thursday and have been sent to the Committee for Financial Supervision CFT for review and advice, Finance Minister Hiro Shigemoto said.
Due to the serious nature of government's financial situation, Shigemoto has decided to continue to monitor that expenses are incurred according to the financial rules and regulations as stipulated by law. This means all expenses will continue to undergo the established financial controls by the Ministry of Finance, with the exception of the budgets for Parliament, the State Councils, the Prosecutor's Office, the Court, and the Cabinet of the Minister Plenipotentiary in The Hague.
Two CFT Secretariat technocrats worked with Finance Department technocrats to review the changes that were made to the national budget. The changes took into consideration the CFT letter issued in January, which estimated the budget deficit to be NAf. 30 million.
An additional NAf. 15 million was added to this deficit due to the agreement signed with the unions WICSU and ABVO to grant civil servants, teachers and staff of the subsidised school boards the 3.3 per cent cost-of-living adjustment in July, retroactive to January 1, 2011.
NAf. 16 million in cost also was added as adjustments that would have been corrected by means of a budget amendment later this year. However, Shigemoto said it had been decided to include them now. These additional expenses include areas such as an increase in subsidy for the drug rehabilitation centre Turning Point, an increase in the budget for the Constitutional Court, the Plan of Approach for the Justice Ministry, and the Joint Court of Justice.
The proposed solutions to cover the total deficit, which includes the additional cost, totals NAf. 61 million. Cost-cutting measures that will be taken across the seven ministries were discussed and jointly decided on with the Secretaries-General totalling NAf. 14.4 million.
In the adjusted budget, there is a total of NAf. 32 million in incidental cost. It is proposed to cover these incidental expenses from government's cash reserves, as these are one-time expenses that will not come back in 2012 and subsequent years.
"Government will decrease its growth factor from two per cent to 1.3 per cent, since we do not agree with the projected economic growth of 0.3 per cent.
"We feel that this percentage does not take into consideration government's contribution as a result of taking over the tasks executed by the former Antillean Central Government as well as government's decision to pay the additional 3.3 per cent in cost-of-living adjustment to all civil servants, teachers and subsidised school boards' teaching staff," the minister said in a press release.
"Also, additional income of NAf. 5 million in dividends was incorporated and a total of NAf. 3.8 million in revenue was included for the second half of 2011 under new policies. This will come from an increase in fees for work permits and the introduction of a non-refundable fee for residence permits," Shigemoto said.
Government wants CFT give its advice on the budget adjustments before sending them to the Advisory Council and Parliament. This approach has been taken to save time and ensure that government does not have to go through another round of debate in Parliament to later discover that the CFT does not agree with the budget as presented, the minister said.
The Consensus Kingdom Law on Financial Supervision for Cura�ao and St. Maarten stipulates that the budget has to be established, but it does not stipulate by which entity; hence, it can also be done by the Council of Ministers, Shigemoto said.
He also will write to CFT on Friday about the status of the appointment of St. Maarten's representative to its board. "The longer this takes places us at a disadvantageous position," said Shigemoto.
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