Published On: Thu, Dec 11th, 2014

‘Solution necessary for financial problems social funds and government companies’

President of Cft Age Bakker regarding 2015 budget Curaçao

StudiorootzWILLEMSTAD - Despite the huge efforts of Curaçao the past period to enhance its public finances, the Cft still sees a number of challenges for the coming period. Especially in the area of the social funds and the government companies important steps need to be taken to make the government budget structurally sustainable: ‘We are on the right path, but we are not there yet’.

The Board of financial supervision for Curaçao and Sint Maarten (College financieel toezicht - Cft) visited Curaçao in the second week of December. There the Board spoke with the deputy Governor, the Council of Ministers, the Ministers of Finance, of Traffic Transportation Urban Planning and of Healthcare Environment and Nature as well as the Parliament. The Board also met with the Green Town Foundation concerning future perspectives of the area around the refinery.

Execution budget 2014

It is expected that 2014 will present a balanced view. This includes an addition to the general reserve for the compensation of the deficits of the previous years and an addition to the swing fund of the SVB to complement it. The tax revenues are disappointing this year, but on the other hand there are windfall gains on the expenditure side, as well as higher dividend receipts.

Proposed budget 2015

In the meanwhile the budget has been adopted by Parliament. After the official stipulation thereof, the Cft will submit its definite advice. Although it seems like the budget will be balanced, there are risks regarding the social funds and government companies. Besides, in its conversations with the ministers, the Cft has asked special attention for the planned government investments that seem to be too high in scope.

Social funds

It becomes clear that the measures already taken in the area of the social funds (Basic Insurance, AOV) are not enough. Policy intensification is necessary to reduce the strongly increasing deficits. The realization numbers show that deficits still arise. For the Basic Insurance, management measures have been identified. President Age Bakker: ‘We urged the government to come up with AOV regulation in the first quarter of the year.’

Companies

The last time work visits were made to the government companies Aqualectra, CDM and CPost International, which are facing difficult times. This time around the Cft spoke with the ministers concerning the financial position of the government companies. There are plans of action, now it comes down to the implementation of these. This requires a collective approach, seeing that after all it is a collective responsibility. Big savings can be realized in the area of (personnel) costs and where possible the government will have to facilitate in this process. It is agreed that progress monitoring will take place on a quarterly basis.

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