Urgent attention again sought for Saba’s financial situation

The Public Entity Saba has once more sought urgent attention for its dire financial situation. The 2022 budget has a deficit of US $1 million and as long as the free allowance (“vrije uitkering”) is not increased, Saba will keep being confronted with structural shortages to finance the government’s operations.

The Committee for Financial Supervision CFT paid a visit to Saba on Monday, November 1. A meeting was held with the Executive Council.
(Photo GIS Saba)

On Tuesday, November 2, the Public Entity sent letters to Dutch caretaker State Secretary of Home Affairs and Kingdom Relations Raymond Knops and the Permanent Committees for Kingdom Relations of the First and Second Chamber of the Dutch Parliament to see a solution.

For the second year in a row, Saba was forced to submit a budget with a deficit of about US $1 million because the free allowance has not been substantially increased for more than 10 years to the current situation. Last year, the Ministry of Home Affairs and Kingdom Relations BZK made funding available to cover the deficit. In the letter to Knops, Saba’s Executive Council made an urgent appeal to find a solution for this year’s deficit.

Because Saba is required to have a balanced budget under the financial law FINBES, the budget, which has been stripped to a bare minimum, has been made balanced by covering the deficit from the general reserve. This is only a temporary solution and is not sustainable for the long term.

Since the multi-annual budget 2022-2025 is not balanced, the Committee for Financial Supervision CFT has abstained from positive advice. The CFT advised taking the issue to the Ministry of BZK to find a structural solution for the budget deficits. The Executive Council has written a letter to the CFT in response to the latter’s recent advice with regard to the draft budget 2022-2025.

A delegation of the CFT visited Saba on Monday, November 1, and met with the Executive Council to discuss the financial dilemma. Saba Commissioner of Finance Bruce Zagers stated afterward that, in his opinion, the CFT, as a neutral supervisor, should advise the Ministry of BZK to solve the matter, instead of telling Saba to do so.

“The CFT lets us know when we do something wrong. In the same manner, the CFT should tell the Ministry when it needs to do the right thing. The CFT knows we can’t influence the free allowance, and they should not put the blame on us, telling us to solve it. They should understand our problem and call on the Netherlands to solve it,” Zagers said.

Different reports, but also the CFT, have pointed out that the level of the current free allowance is too low for the Public Entity Saba to duly carry out its tasks. The intensity of the tasks that the Public Entity carries out has increased over the years.

“We see no other possibility than to make use of our reserve. We already have a skeleton budget and further cost-savings will result in a neglect of tasks and substantial additional costs in the future due to the backlog in maintenance. Maintenance is already executed at an absolute minimum and, as is widely known, we have been forced to cover structural costs from incidental allowances. At the same time, Saba, as the sole Dutch Caribbean island, has had its financial household in order for multiple years and received unqualified audit opinions every time,” it was stated in the letters to State Secretary Knops and the Dutch Parliament.

“We have cut to the bone. Everyone in The Hague agrees that something needs to be done for Saba. Report after report has confirmed this. Yet, this situation continues with every possible excuse having been used not to structurally solve the matter of a higher free allowance,” said Commissioner Zagers, who pointed out that the State Secretary has even acknowledged that the free allowance is too low.

In the letter to Knops and the Parliament, the Executive Council indicated that the time leading up to a new Dutch Government created “a new momentum” to fix the free allowance, thereby solving Saba’s urgent financial situation.

GIS Saba

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