Budget 2009 meets standards debt restructuring

October 03, 2008 6:32 AM

The draft-budget of the island territory of Curacao for 2009, shows a deficit of 15 million guilders. This budget meets the standards agreed with the Netherlands to qualify for the debt restructuring as included in the order in Council for the Kingdom (AMvRB) Financial Supervision.

These agreements assume a balanced budget of the revenue account, which implies that the current revenue in a budget year must balance the current expenses, including interest and debits. A surplus of 700.000 on the revenue account is assumed in the 2009 draft-budget. The other agreement is that the interest charges in a certain year may not be more than 5 percent on the average revenue of the three preceding years. Also this condition is met. There is a 15.7 million deficit on the capital service (investment budget), but this is also within the settled standards.

In a press release the BC warns that without additional efforts, starting 2010, the revenue account will start showing deficits. This is mainly the case, because some incidental revenues will be lost after 2009. Structural cost-reduction- or revenue increasing measures will be required. The BC says that this requires efforts of the government as well as her services, but also the population will have to assume her responsibility.

The 2009 budget is in the light of the preparations made to realize the new Country Curacao. Important is that the financial situation of the island is sound, with a ‘manageable debt position and minimal a balancing revenue account budget that are based on sound manageable expenses per sector and maximized revenue’.

In order to effect these objectives, it is important that in all sectors where there are unmanageable expenses, necessary measures will be taken to create a balance again between revenue and expenses. Measures in the 2009 budget that are not yet carried out, are included again. The purpose of last year’s financing scheme was to balance the budget, by means of increasing the revenue and cut costs. In addition, room is also reserved for new policy initiatives via the Social Economic Initiative (SEI). The idea is that the SEI is implemented between now and 2010 and that the effects are felt for years. An amount of 267 million guilders is involved with the SEI. The Netherlands will take care of 131 millions, while Curacao pays 31 and the private sector 105 guilders.

The Island-budget was submitted to the Island Council yesterday, and with that complied with the legal regulation that the budget must be submitted to the Island Council not later than October 1.

(Source: National newspaper Amigoe)

2 October, 2008