Thursday , February 2 2023

Saba faces challenges, but remains steadfast

Despite the many fi­nancial challenges that Saba Government finds itself con­fronted with. it has remained steadfast in its approach to achieve its goals. with or without a well-financed bud­get. Finance Commissioner Bruce Zagers stated this dur­ing the handling of the 2016 Year Report in the Central Committee and the Island Council on Wednesday.

“Financial management in Saba has rapidly improved and we are the lone example in the Dutch Caribbean.” said Zagers. referring to the fact that Saba for the fifth consecutive year achieved a positive opinion from its external auditor Ernst & Young. In line with the previ­ous year, the auditor was of the opinion that the financial statements gave a true and fair view, he said. “I am extremely proud of what our small organisation with limited resources has been able to achieve not just this year but for the last sev­eral years. The positive au­dit statements that Saba has been able to accomplish arc yet to he achieved by any of the other islands in the Dutch Caribbean. This is something that as an island and as a government administration we should he proud about”, the Commissioner told the Island Council Members.

The 2016 Year Report. which was drafted by Saba’s own Finance Department. met the criteria of the law and this year it was also pre­sented on time. The financial statements showed financial activities on the income side totalling US S14.464.756 and on the expenditure side US $14.395,693. The 2016 Year Report closed with a surplus of about US $69,000 which is considerably lower than the closing balance for 2015 which was US $865.758.

Although the year report was closed with a small sur­plus, Zagers said it was im­portant to point out that this positive result was influenced by a release of the “alloca­tion reserve maintenance cost” for US $111.688. This reserve kites back to 2013. Without the release of these funds the result would have been US $42.625 negative he said. With the surplus from 2016, the general reserve now stands at approximately US $8.5 million. A few years ago the Island Council agreed to establish a buffer capital reserve which should even­tually reach US S2 million. The current amount of the buffer capital remains at US $435,000.

Zagers said that based on the current trend of seeing the surplus decrease drasti­cally for the last three years it would be extremely difficult to increase this buffer capital as long as the local govern­ment had to continue work­ing with skeleton budgets. “The closing balance of 2016. when compared to that of 2015, should yet again send a clear message to the Netherlands that the free al­lowance needs to he adjust­ed. If this adjustment does not materialise, even though a report commissioned by The Hague stated that an in­crease was absolutely neces­sary, 2017 will be even more difficult to manage financial­ly than in 2016.” he said. The Commissioner warned that for 2018 and beyond it would be “almost impos­sible” to balance the budget and execute any policy espe­cially if the incidental special grants were not made struc­tural by the Dutch Govern­ment.

Zagers said the island’s li­quidity position remained a concern. “With basically no new structural money com­ing in and with ongoing in­vestments from both inciden­tal funds and with local funding, we need to keep closely monitoring the liquidity posi­tion.”

The Commissioner said that although the Saba Govern­ment had a bank balance which showed a “very high amount,” this was “not a true reflection” of the actual liquidity position. “The bal­ance which can be consid­ered free cash is only a small fraction of our total budget. We need to continue being vigilant. We need to con­tinue being responsible not just with budgeting but even more-so with our spending.”

Zagers explained that in October last year, based on the advice from the Finance Department, measures were put in place to control gov­ernment spending. “I hope that this does not have to happen this year, but had these measures not been taken, the 2016 Year Report would have definitely ended with a negative balance.”

Even though Saba Govern­ment has proven that it man­ages its finances in a respon­sible manner and that it has a positive track record, without any increases or indexation of the free allowance and the cost of doing business for government increases, it has become increasingly dif­ficult to balance budgets, to balance budget amendments and to ultimately finish the year reports with a positive balance.

Zagers said that this mes­sage has been strongly ex­pressed by the Executive Council in the Netherlands and he said he trust that the Island Council would do the same during its visit to The Hague next week. “We have to be relentless with our message. The 2016 closing balance only substantiates government’s case that more funding is necessary to prop­erly execute its legal tasks.”

Saying that naturally the Saba Government was happy with the many compliments for its financial management, Zagers warned that these compliments were “not pay­ing the bills” and not reduc­ing poverty or creating new jobs.

“We receive incidental funds for projects. but the compliments are not keep­ing these projects opera­tional nor are they paying for the structural maintenance. The issue with the level of the free allowance needs to be addressed sooner rather than later. I hope that the new Dutch Government will once and for all stop treating the islands and the people as beggars and second class citi­zens.” he said.

The Daily Herald.

Health Study kicks off on Saba
Information session Lindenwood University