DH | MP salary cut still a must, says Knops

Staatssecretaris Raymond Knops  © ANP

THE HAGUE–Dutch State Secretary of Home Affairs and Kingdom Relations Raymond Knops insists that the members of the St. Maarten Parliament first have to take a ten per cent pay cut before The Hague will disburse liquidity support for the St. Maarten government.

Knops stated this in response to written questions submitted by Member of the Second Chamber of the Dutch Parliament Ronald van Raak of the Socialist Party (SP) last month. Van Raak expressed concerns about what he referred to as the “refusal of the St. Maarten Parliamentarians to cut their own high salaries.”

Knops confirmed on Monday that a lower salary for the Members of Parliament (MPs) remains a precondition for future financial support for St. Maarten. “The lowering of the salaries and/or the allowances of the MPs is a precondition for possible liquidity support over 2019.”

Knops explained that the St. Maarten Parliament had approved the 2019 budget on July 2. This budget includes a 10 per cent reduction of the MPs’ salaries. However, the actual reduction of the MPs’ salaries also requires a separate law proposal, supported by two-thirds of Parliament, meaning 10 of the 15 MPs, he added.

In a motion adopted as part of the 2019 budget handling, the St. Maarten Parliament indicated that it was willing to discuss a salary reduction. “However, the Parliament wants to look further than only the salaries of MPs and Ministers. Also, the Parliament has made clear in this motion that it wants to cut the permanent expense allowances for MPs and Ministers and to cut the travel budget in 2020,” Knops stated. The Council of Ministers already opted on a voluntary basis to a salary cut of 10 per cent for 2019.

Knops explained that the Dutch government, based on article 36 of the Kingdom Charter, has offered liquidity support to St. Maarten. In the last quarter of 2017 and the first quarter of 2018, St. Maarten received long-term, interest-free loans for a total amount of 38 million euros. These loans came from the Recovery Trust Fund.

In the second quarter of 2018, the Dutch government facilitated a liquidity loan of 16 million for St. Maarten with a repayment term of 30 years and a 0.74 per cent interest rate. Based on the advice of the Committee for Financial Supervision CFT, the Dutch government has attached preconditions to the liquidity support.

To compensate future budget deficits, St. Maarten needs to increase tax compliance and raise the tax revenues. For this purpose, the St. Maarten Tax Office is being restructured. Funds have been made available in the 2019 budget to facilitate this.

Through the Trust Fund, managed by the World Bank, the Netherlands has made available US $30 million for a reform programme, including technical support, to improve St. Maarten’s financial management. According to Knops, the Development Policy Operation is an approved instrument that the World Bank has already successfully used to support many countries, including in the Caribbean.

Bron: Daily Herald

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