The St. Maarten Hospitality & Trade Association, the largest business representative on the island, has taken notice of the increased discussion of late, both in and out of the media, about the instability of our Government and the damage it is doing to our economy. The lack of trust in our current governing system has led to a widespread belief that transparency and integrity are seriously lacking.
According to our recollection we have not had a continuous government, despite periods with the same Prime Minister for the past 6 years, on average a new government has been sworn in each year. Is it any wonder, investors are all sitting on the fence or seeking clearer water?
Let’s start with taking the example of the release of the alleged financial statements of the Harbor Group of Companies, the SHTA does not agree with how these statements were presented which in and of itself is a breach of integrity; nevertheless we hereby request that all of the other government owned companies (all 11 of them) comply with the law and make their Financial Statements available to the general public with detailed disclosures including those of Related Party Transactions. Let us all call on our shareholder representatives to insist that those managing the people’s patrimony, are making the best decisions for the shareholders not their strategic partners. This should not be something to be hidden—full disclosure should give confidence not a cause for concern.
In essence, the shareholders representative and the Managing Boards must work to ensure that all issues of transparency and full disclosure are addressed, erasing misperception and improve clarity. All queried subjects in the leaked financials are not necessarily incorrect but because of the entities heightened responsibility to the people; both its Management and Managing Board should be held even more accountable to eliminate questions of impropriety while always making the best decision for the shareholder.
It may seem like the Harbour is taking it directly on the chin; but upon closer inspection many of our Government owned entities are riddled with the same issues; ergo The Housing Foundation Crisis, Cost of utilities from GEBE crippling local businesses and keeps potential investors away, and our Communications Companies can barely provide basic services. It may even be said in recent retrospect that St. Maarten’s government-owned companies are almost in disregard where it comes to corporate governance, integrity and transparency requirements. We believe that all publicly owned government entities, as well as our government have a duty and obligation to publicly issue their financial statements in a timely and complete manner.
Keeping in mind that the government owned companies represent a significant public financial asset, some 2-3 times the size of the entire Public Sector Budget. Thus to exclude them from analysis of St. Maarten’s overall financial situation and determining the country’s compliance with requirements of a solid budget as stated in the Kingdom Law on Financial Supervision is absurd.
Regarding the state of Government finances, the SHTA was also disappointed to learn from Professor Dr. Age Bakker during his presentation to SHTA Members on December 4th, that government revenue has remained stagnant at some $420 Million Guilders and as we listened to Minister Hassink’s presentation to Parliament on the state of our finances we grew more and more depressed; indeed what has been the cost of all this instability and increasing Tax burden on the back of the Private sector.
If government’s revenue has remained flat even after a 2% increase in Turnover Tax what is the point of continuing with the 5% TOT. In our view the law of diminishing returns is in full effect and SHTA has stated many times the TOT legislation is extremely destructive and should be repealed immediately. The biggest effect of the “temporary” increase was to strengthen the grey economy and to give an added advantage to competitors operating outside of our jurisdiction ie NOT Local employers.
With all of the above mentioned and more, the New Gumbs cabinet certainly has its hands full. To the extent we can help get the ball rolling the SHTA has compiled its top 10 Wish List.
SHTA’s NEW YEAR NEW GOVERNMENT Top 10 Wish List
1) Government Stability (a Government that does what it says it will do) with clearly defined programs, policies and objectives
2) To increase tax compliance on those operating outside the law so the tax basis can be broadened
3) Financial Transparency, accountability and customer service at all levels of the Public Sector
4) Repealing of the Turnover Tax legislation
5) Swift Functioning Jurisprudence and application of existing laws.
6) A Functioning Funded Tourism Authority, with the proper and accurate and statistics of our main economic pillars: Cruise, Stay over and Marine
7) Modernize and Flexibilize the Labor Laws
8) Improved Infrastructure and essential public works; sewage, management of the salt pond, sidewalks, garbage disposal, etc.
9) Overhaul education system to create synergy that will match the future employment needs of the island
10) Improved Environmental Management via sustainable developments.
Our future starts now—Happy New Year!
The SHTA is dedicated to bringing quality to all aspects of life on St. Maarten by promoting sustainable development for its members in cooperation with the social partners and the creation of a fair marketplace. For more information please contact our offices at 542-0108 or visit our website at www.shta.com.