Published On: Mon, Mar 10th, 2014

Cft Chairman Age Bakker: “Curaçao has fully complied with the instruction”

Age BakkerWILLEMSTAD – The Board of financial supervision Curaçao and Sint Maarten (College financieel toezicht Curaçao en Sint Maarten - Cft) informed the Kingdom Council of Ministers (Rijksministerraad - RMR) on March 7th that Curaçao complies with all the components of the instructions, so declares Cft Chairman Mr. Age Bakker. The RMR gave the government of Curaçao an instruction in July 2012 with the goal to bring the budget in line with the Kingdom Charter on financial supervision Curaçao and Sint Maarten (Rijkswet financieel toezicht Curaçao en Sint Maarten - Rft). Curaçao has fully complied with all components of the instruction, resulting in more stable government finances.

Components instruction

In April last year Curaçao already met four of the six components of the instruction. These four components concerned, taking measures to cover the rising deficits, downward adjustments of the (long term) estimates within the 2012 budget, strengthening of the monitoring of the budget implementation and the prohibition to borrow money. In the two other parts of the instruction, the vacancy freeze and the compensation of deficits from previous years, the evaluation of Cft remained in place. Since the beginning of April last year it was already possible to loan again.

Vacancy stop

The intention of the government to make the government smaller and more efficient, while it was not clear yet at the moment whether this would actually happen, was up till early 2013 reason to keep up the vacancy stop. It is now clear that the personnel costs remained within budget. This prompts the Cft to stop checking in on the vacancy stop. The government is preparing a wide range of measures to make the government smaller and more agile. These measures are not only directed towards the number of officials, but also on the secondary work benefits and the pension arrangement. It is up to Curaçao itself to structurally continue to exercise control and avoid the administrative costs to increase again with the expiry of the vacancy stop.

Deficit compensation

Late 2013, the Cft and the government reached an agreement on the height of the deficits from previous years that needed to be compensated. In the second budget amendment of 2013, which was adopted in February by the Curaçao Parliament, this was correctly processed. This action fulfills this component of the instruction. The Cft will monitor through the annual statements if the budgeted surpluses are actually realized.

Loans

Although Curaçao had been able to make loans since April last year, the instruction included an additional condition regarding the financing of the new hospital. There were measures that needed to be taken to make a responsible exploitation of the hospital possible. Upon its evaluation the Cft indicated in its advice on the adopted budget 2014 to have sufficient confidence in a solid business case. In principle, Curaçao can take a loan for the new hospital. This means that the concrete loan for the hospital is awaited. Naturally, upon entering into the loan, the (regular) conditions of the Rft need to be fulfilled.

Cft Chairman Age Bakker: “With the fulfillment of the instruction, Curaçao is taking an important step towards the consolidation of the public finances. The challenge is to maintain the good momentum during the coming years, so that the government can provide the required provision level in an effective manner on Curaçao. In addition, a precarious financial situation of a number of government agencies will still require a lot of attention.”

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