Support package 4.0 for Caribbean Netherlands

The Dutch government last week de­cided to again extend the economic support and re­covery package for Bonaire, St. Eustatius and Saba. The measures of the so-called emergency package 4.0 for the Caribbean Netherlands will be valid until mid-2021.

In a letter he sent to the Second Chamber of the Dutch Parliament last Fri­day, State Secretary of Home Affairs and King­dom Relations Raymond Knops explained that ex­tending the package for the three islands was justified.

“The current economic situation of the Caribbean Netherlands remains wor­risome,” he stated, noting that the strict measures for incoming traffic combined with the worldwide strong decrease of travel move­ments resulted in merely a fraction of the regular number of tourists visiting the islands.

Bonaire estimated that tourism for the first months of 2021 was 85 per cent lower when compared to the same period last year. St. Eustatius and Saba have been closed for almost a year and with good reason, due to the limited health care capacity. This has re­sulted in a very number of tourists.

“It is expected that eco­nomic recovery will only take place after tourism increases. The tourism high season (December-March), during which period a large part of the money is made, can be considered lost,” stated Knops.

The state secretary clari­fied that all people on the islands should be vacci­nated by June 1, the start of the hurricane season. “However, this doesn’t mean that immediately all incoming travel measures will be relaxed,” he added. The islands have already indicated that, once all resi­dents have been vaccinated in two rounds, it is the in­tention to (gradually) re­open for visitors.

Knops stated that the point of departure re­mained that a similar ap­proach was implemented for the islands as for the Netherlands. “Following the Netherlands systemat­ics in principle works good for Bonaire, St. Eustatius and Saba, because many support measures corre­spond with the necessary compensation. At the same time, the specific social-economic context needs to be taken into account, in­cluding the dependence on the tourism sector.”

The temporary subsidy regulation wage costs and income loss, the subsidy regulation compensation fixed costs, and the deferral of payment of taxes will be extended through the sec­ond quarter of 2021.

Under these measures, employers with at least a 20-per-cent loss of turn­over can receive a subsidy of up to 80 per cent of the maximised day wage. Self-employed entrepreneurs can receive a subsidy of up to 80 per cent of the legal minimum wage. And, dis­missed employees who are out of work due to the co­rona crisis, can receive 80 per cent of their last salary.

New in the extended 4.0 emergency package is the regulation that entrepre­neurs receive support to expand or restart in a situ­ation where starting their business is unprofitable at this time. By having the subsidy continue, the entre­preneur can make a speedi­er restart which means they can be ready when tourism picks back up.

To support businesses in the tourism sector, the Dutch government in­creased the subsidy per­centage for the fixed costs compensation to 85 per cent for employers in the Caribbean Netherlands
that have been suffering a turn-over loss of at least 30 per cent. Also, the maxi­mum of the fixed costs com­pensation subsidy will be increased from US $99,000 per quarter to US $400,000 per quarter.

Furthermore, the defer­ral of the payment of taxes will be deferred to July 1, meaning that the repay­ment of taxes will start three months later, on Oc­tober 1. The public entities Bonaire, St. Eustatius and Saba have, in line with the municipalities in the Neth­erlands, received compen­sation in 2020 for their loss of income.

Knops said he has asked the Committee for Finan­cial Supervision CFT to give advice on the expected loss of income and the ad­ditional costs they had due to the corona crisis, for ex­ample in the area of public health and maintaining law and order. Based on this advice, a decision will be taken how much compen­sation the islands get this time.

In his letter to Parliament, Knops also mentioned the enormous impact that the corona crisis has on the community and the econo­my of the islands. He noted that the most important economic pillar has largely crashed, namely tourism, and that other economic activities, such as Saba Uni­versity School of Medicine, have been hit hard.

“The Dutch government is aware that the current situ­ation heavily weighs on the shoulders of employees and employers in Bonaire, St. Eustatius and Saba. Those who lost their job because of the corona crisis, often fall back to a relatively low level of existence, also com­pared to the Netherlands,” the state secretary said. “With this support and re­covery package, the Dutch government will keep sup­porting entrepreneurship and jobs, with an eye on the social-economic context of the islands. The Caribbean Netherlands will be involved in the Dutch economic recovery policy, whereby a connection is sought with the economic and social circumstances, and perspectives,” stated Knops.

The Daily Herald.