Dutch caretaker State Secretary of Home Affairs and Kingdom Relations Raymond Knops has given the public entity Saba permission to cover the 2022 budget deficit from the general reserve.
Knops stated this in a letter that he sent to the Saba Island Council on Thursday. Saba’s 2022 budget shows a US $1-million deficit and as such it does not comply with the law, which prescribes a balanced budget. Saba decided to cover the deficit from the general reserve.
The Committee for Financial Supervision CFT issued a negative advice on this decision by the Saba government. It argued that the structural deficit requires a permanent solution and pointed out that the general reserves should be used for unexpected setbacks. Saba’s Executive Council in November 2021 sent letters to the CFT and to the state secretary to explain the dire situation in which the local government has been finding itself due to the lack of structural funding from the Dutch government to cover the operational cost of the public entity Saba. Saba’s Finance Commissioner Bruce Zagers has referred to Saba’s budget as a “skeleton budget” as it only covers the bare minimum.
“It is clear that it concerns a structural problem, which has been recognised before, but for which no solution has been found,” stated Knops. “It has been agreed that further consultations on finding a structural solution will take place after a new Dutch government has been installed,” he added. “For this reason, I am prepared to give my one-time consent to the covering of the deficit from the general reserve,” stated Knops. By law, the budget requires the approval of the minister of home affairs and kingdom relations.