Prime Minister Silveria Jacobs (at podium) addressing MPs as Finance Minister Ardwell Irion (sitting, back left) listens during Wednesday’s meeting.
~ 1.3 million in annual savings ~
PHILIPSBURG--Members of Parliament (MPs) on Wednesday unanimously passed the Temporary National Ordinance on the amendment of the employment conditions of political authorities.
The law legitimises the 25 per cent reduction in the employment benefits of ministers and MPs and is one of three cost-cutting laws Parliament handled this week to enforce several conditions imposed by the Dutch government for the second tranche of liquidity support, which the country has already received.
The 25 per cent reduction will save NAf. 1.3 million per year, which Prime Minister Silveria Jacobs said is a miniscule amount compared what is really needed. The St. Maarten Stimulus and Relief Plan (SSRP), for example, pays out NAf. 9 million each month to support persons affected by the COVID-19 pandemic.
Jacobs said the Dutch government believed that the 25 per cent reduction was how top earners had to show solidarity with those suffering in the country. The cuts have been in effect since last year and the passing of the law formalises the process.
In explaining the build-up to the 25 per cent reduction, Finance Minister Ardwell Irion said a 10 per cent reduction was applied as of April 1, 2020. This included no longer granting monthly allowance for representation, which saved 6 per cent; discontinuing the monthly compensation for transport expenses which saved NAf. 500; and reduction in the remuneration until 10 per cent was reached.
Irion said Jacobs’ NAf. 21,294.55 remuneration has been reduced by six per cent and by 2.348 per cent. To reach 10 per cent, a further reduction of 1.652 per cent has to be made. This is equal to an amount of NAf. 351.79.
The NAf. 20,368.70 remuneration of other ministers and the Chairperson of Parliament and Minister Plenipotentiary has been reduced by six per cent and 2.455 per cent. To get to 10 per cent, a further reduction of 1.545 per cent has to be made. This is equal to an amount of NAf. 314.70.
The NAf. 19,442.85 remuneration for other MPs has been reduced by six per cent and 2.572 per cent. To reach 10 per cent, a further reduction of 1.428 per cent has to be made. This is equal to an amount of NAf. 277.64.
There was an additional 15 per cent cut as of July 1, 2020. This includes not granting any vacation allowance, equivalent to six per cent, and a reduction in remuneration by nine per cent. The measures as of April 1 and July 1, 2020, result in a total reduction of the employment packages of 25 per cent and of the following total remuneration reductions:
The Prime Minister 1.652 per cent (NAf. 351.79) plus nine per cent (NAf. 1,916.51), which equalled 10.652 per cent (NAf. 2,268.30).
The other ministers, Chairperson of Parliament and Minister Plenipotentiary: 1.545 per cent (NAf. 314.70) plus nine per cent (NAf. 1,833.18), totalling 10.545 per cent (NAf. 2,147.88).
The other MPs 1.428 per cent (NAf. 2,77.64), plus nine per cent (NAf. 1,749.86) totalling 10.428 per cent (NAf. 2,027.50).
Irion said even before the conditions from the Netherlands, government had already started the process of discussing internally in which areas cost could be cut. One of the first areas where cost was cut was travel, which was slashed by up to 95 per cent, allowing just enough budget for Irion and the Prime Minister to travel if they were required to do so for discussions with the Netherlands.
Other areas where cuts were made include uniforms and overtime. Consultancy and training costs were reduced. Government also introduced a petrol-plus system for gas. Under this system everyone who has a government vehicle will have to input information such as their number plate. The system also sets a limit to the amount of gas government vehicle users can top up into these vehicles.
The system allows authorities to see who is potentially abusing the system, Irion said. In the last month, authorities have already identified loopholes, where persons who were not entitled to gas bonds had been receiving them. This allows for loopholes to be addressed immediately.
The Ministry of Finance is also working with the Ministry of General Affairs and facility management to enforce that the department uses the procurement systems that are in place. Purchases must be recorded so authorities can know what amount comes in, what is spent and who spent it. This is part of the process of becoming automated and it should also assist with obtaining information faster.
Pay slips will also be sent digitally, which will also save cost. It took the persons who had the task of folding pay slips and placing them in envelopes two to three hours to do so. The travel policy is also being adjusted.
A suggestion is to expand the Treasury Department and make it an official department. Currently there is no department, just two persons who perform the tasks. Two additional persons will be added to make up the department.
Another measure to be embarked on is the purchasing of tickets in-house rather than using third party vendors, which is expected to save 30 to 40 per cent. Under the current system, when a ticket is reserved, by the time the process for the purchase is completed the cost of the ticket is sometimes 60 per cent higher.
In her opening remarks, Jacobs said the sharing of information with Parliament has been constant “from day one” and it has been factual. She acknowledged that sometimes things have to be repeated to be understood and she will do this to counteract false narratives and ensure that the wrong story is not out there, as misinformation can have serious repercussions.
She thanked MPs and ministers for their solidarity and for standing with the people of St. Maarten, a sentiment expressed by Irion at the start of the meeting on Tuesday. Getting the economy up and running and finding other income streams is also being done simultaneously.
The other two cost-cutting laws that were passed were the temporary national ordinance for the standardisation of top incomes and adjustment of employment conditions at (semi-) public sector entities, which was approved on Tuesday evening, and the Temporary National Ordinance COVID-19 for cuts in the employment conditions for civil servants, which was passed on Wednesday evening.
