Saba budget deficit solution is approved

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.

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