WILLEMSTAD — The College Financial Supervision (Cft) is worried about the implementation of some of the structural measures which are stated in the budget of the island territory of Curaçao. For example, the Cft calculated that the intended implementations would yield 21 million guilders less than the budgeted 124 million guilders. The Cft stated this in reaction to the first quarterly report of the island territory of Curaçao.
The quarterly report is dated June 10th, of this year, but has only recently been forwarded to the Island Council. Cft’s reaction is dated June 19th. In their presentation letter to the Cft, the Board of Governors apologizes for the fact that the quarterly report was forwarded too late. Actually, the report should have been submitted on May 15th, but the Board of Governors explained that they were still looking for the best manner to present the report to the Cft. In their letter, the Board of Governors state that they will comply with the agreed upon standards which are laid down in the General Measure of National Government (AMvRB) Temporary Financial Supervision. The progress-report on the first quarter stands at a surplus of 35.4 million guilders. This is 8.9 million guilders more than originally budgeted. Initially, it projected a surplus of 26.7 million guilders. This difference is due to, amongst others, additional revenues from profit tax (25.6 million), wages- and income taxes (12.9 million) and land-tax (1.1 million). The expenditures of the island during the first three months of the year were also lower (10.8 million guilders).
On the other hand, the revenues of the entry ‘interest and other posts’ were also lower. This was caused by the fact that the payments in the framework of the debt-reconstruction were not received by the island in March, so that an amount of approx. 30 million could not be included in the budget. The Board of Governors assumes that these revenues will be transferred retroactively until January 1st of this year, in conformity with the promises made by State Secretary Ank Bijleveld-Schouten (Kingdom Relations, CDA).
Negative developments
In their quarterly report, the Board of Governors state that two negative developments had taken place after March 1st, this year. It concerns amongst others, the distribution of dividends of Curoil being lower than originally budgeted. The budget had namely considered a distribution of dividends of 20 million, while it now has a dividend of 13.7 million. In addition, the Board of Governors also agreed with the new tariffs for the St. Elisabeth Hospital, which includes an additional expenditure entry of 5 million.
In their reaction on the quarterly report, the Cft states that the Board of Governors is full of ‘intentions’. The ‘intentions’ are to implement measures to guarantee that the budget for next year will be balanced. "The College has consistently hammered away that having intentions was not sufficient. It concerns the implementation of the intentions and the plans. For too long and too often, it has only amounted to plans, which led to the island territory ending up in a situation with high, intolerable debts. In view of the progress of the measures in the first quarter, the college is not entirely reassured. A large part of the measures have already been delayed."
The Cft is also worried that some of the structural measures are still forthcoming, which are compensated by incidental assets. "This way, the structural character of the governmental finances will encounter difficulties." One of the setbacks is the introduction of the medicine compensation system. "You state that each setback will be compensated within the budget of the Bureau medical expense provisions. The Cft concludes that in this way, the planned saving will be obtained this year," but a decision on this should have already been taken.
In their quarterly report, the Board of Governors state that two negative developments had taken place after March 1st, this year. It concerns amongst others, the distribution of dividends of Curoil being lower than originally budgeted. The budget had namely considered a distribution of dividends of 20 million, while it now has a dividend of 13.7 million. In addition, the Board of Governors also agreed with the new tariffs for the St. Elisabeth Hospital, which includes an additional expenditure entry of 5 million.In their reaction on the quarterly report, the Cft states that the Board of Governors is full of ‘intentions’. The ‘intentions’ are to implement measures to guarantee that the budget for next year will be balanced. "The College has consistently hammered away that having intentions was not sufficient. It concerns the implementation of the intentions and the plans. For too long and too often, it has only amounted to plans, which led to the island territory ending up in a situation with high, intolerable debts. In view of the progress of the measures in the first quarter, the college is not entirely reassured. A large part of the measures have already been delayed."The Cft is also worried that some of the structural measures are still forthcoming, which are compensated by incidental assets. "This way, the structural character of the governmental finances will encounter difficulties." One of the setbacks is the introduction of the medicine compensation system. "You state that each setback will be compensated within the budget of the Bureau medical expense provisions. The Cft concludes that in this way, the planned saving will be obtained this year," but a decision on this should have already been taken.
The College also criticizes that a decision on the dividend-policy of Curoil is still forthcoming, the fact that setbacks, which have already been observed earlier such as the increase of costs of the health care sector and the additional subsidy for ambulance institute Cems, have not been dealt with on time.
However, the Cft emphasizes that a dynamic approach and implementation of the deployed measures is required and that it is the Board of Governors’ responsibility to aim for this.
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