Friday, Jun 05th

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Editorial - Cleaning up the mess

The intention here is certainly not to spread doom and gloom needlessly, but it's been awfully quiet surrounding Finance Minister Martin Hassink's struggles to substantiate the perceived income shortfall on his 2015 budget and settle the debts to Social and Health Insurance SZV and the General Pension Fund APS.

Both are conditions for St. Maarten to be allowed to push remaining deficits from past years ahead rather than needing to compensate them now. Moreover, all this actually was supposed to happen by the end of May.

The latest known communication from the Committee for Financial Supervision (CFT) in any case did not paint a very reassuring picture. Chairman Age Bakker in a May 20 letter to the minister again voiced opposition to Hassink's apparent plans to convert the outstanding amounts in payment arrangements with SZV and APS.

Bakker thereby reiterated what already had been made clear in the case of APS on April 15: that this would be considered a new, "underhand" loan to which article 16 of the Kingdom Law on Financial Supervision applied. Hassink answered that he intended to continue, as in his opinion article 16 was not applicable.

CFT pointed to characteristics of a loan, such as repayment by means of annuities with a term of 20 years and interest rates varying between 3 and 5.5 per cent. "The unforeseeable risks are for the account of St. Maarten," the letter stated.

Bakker maintained that built-up arrears could not be used as financing construction or automatically be considered a loan. CFT warned that should the minister persist it would advise the Kingdom Government to issue an instruction.

CFT suggested either selling government property or using means gained from savings, which translates to budget cuts. This is acknowledged as "painful" and requiring an effort from the entire Council of Ministers, "but what is in order at this moment."

It's too bad the original plan to involve the still-empty new Administration Building on Pond Island in a deal with APS failed, because the prospects for a solution that won't hurt too much don't look very good. What surely should be prevented is that citizens, having duly paid their taxes, social and pension premiums, somehow get stuck with cleaning up the mess.