Chairman of Cft Age Bakker: ‘Curaçao remains on track with 2016 budget’
WILLEMSTAD - The budget for 2016 is solid. The Cft had a number of recommendations on the draft 2016 budget, particularly focused on the downward revision of the budgeted economic growth figures and a more realistic capital service. The Government has taken the recommendations of the Cft and the Advisory Council into account and adjusted the budget accordingly, which resulted in a budget that is now in order.
The Board of financial supervision for Curaçao and Sint Maarten (Cft) visited Curaçao in the last week of September. The Board met with the Governor, the Council of Ministers, the Minister of Finance and the Finance Committee of Parliament. The Board also met with various stakeholders. Working visits were made to Aqualectra, C-Post International (C-Post) and Curacao Ports Authority (CPA). Finally, there was an introduction to the Bankers Association.
The Cft evaluated the second execution report on budget execution of the first six months of 2015. For now the image looks positive, according to the report. The budget would close the year 2015 with a positive result that would for a great deal be reserved for economically more challenging times. The purpose of this reserve is to prevent that a possible hiccup will directly lead to additional cuts. However, it is expected that the reserve will have to be used right away because the deficits of the social funds have not yet been resolved. Although measures have been taken to solve these deficits for the coming years, partly because of a delayed introduction these do not result in the anticipated savings for 2015 as yet.
Draft 2016 budget
The Cft has received the draft budget for 2016 in time, and submitted its advice. The main conclusions were that the capital service was difficult to carry out, and in addition the Government's economic growth forecasts were too optimistic. The necessary caution is requested in the estimates, since the Cft still perceives some risks for the multiannual budget, such as the enduring deficits in the social funds and a number of ailing Government entities. The Cft learned that the Government of Curaçao has downwardly adjusted the economic growth estimates and in addition has taken several measures to make the capital service more realistic. Herewith the main recommendations have been agreed to and Cft now considers the budget realistic. The management measures regarding personnel charges are an integral part of the measures the Government previously agreed to in order to ensure long-term sustainability of public finances.
It became apparent that the measures to reduce the deficits in social funds have been delayed. As a result, the economization efforts have led to the lower results than was anticipated. Considering the fact that the measures had to yield savings in 2016 and the coming years, the Cft pleads for the earliest possible implementation, in order to ensure the financial sustainability of social funds. In case the measures do not lead to the desired savings, additional measures will be necessary. A careful monitoring of the implementation of the measures is therefore of the utmost importance.
During this visit to Curaçao Cft also visited a number of public companies. The plans of action at the ailing Government entities aimed to the strengthening of the financial situation seem to bear fruit. The preliminary results of the Aqualectra are better than those of previous years.
The preliminary results of Aqualectra are better than previous years. Aqualectra is working on a structural reduction of its operating costs and other efficiency improvement measures, which should make its financial position sustainable, allowing for new investments. Regarding C-Post a revised plan of action was drafted, which should make the financial position structurally sustainable; the respective measures will be further worked out in the coming months.
The Cft has also visited CPA. For years this public entity has consistently led a healthy financial management and is now working on projects to increase the economic growth of Curaçao and to create more employment in the ports.