By Rene Zwart©

The Hague – Although the year is now about halfway through, the Ministry of the Interior and Kingdom Relations (BZK) has still not established the level of the free allowance for Bonaire, St. Eustatius and Saba for the year 2017. This is stated by the Board of financial supervision (Cft) for the islands in their latest bi-annual report. The so-called free allowance can be compared to a (meager) version of the municipal fund municipalities receive in Holland.

“The free allowance for 2017 has to still be determined by the Ministry of the Interior and Kingdom Relations. The Cft believes the annual determination of the free distribution should take place earlier in the year, so that the adaptation can still be processed in the relevant financial year “, according to the Board. If this is not done, the island governments will be forced to assume the 2016 level of free allowance in their budget for reasons of prudence.

The Cft reiterates its earlier criticism that when determining the free allowance, the Kingdom Government ignores wage developments. For example, because of a new Collective Labor Agreement (CLA), the islands were confronted in 2016 with an increase in labor costs of 4% with a free allowance that remained at the same level. Incidentally, independent research has already established in 2013 that the free allowance is structurally about 20% too low to enable the local government to properly perform their tasks. In its half-yearly report, the Cft reports that it coordinated with the ministry last year how the free benefit could be adjusted to wage developments, but a decision on the matter has not been taken as of yet.

The shortcomings in the free allowance causes, among other things, that the islands do not have space in their budgets to reserve for maintenance of buildings and infrastructure. Often, according to the Cft, the government provides a one-time ‘investment contribution’, but “insufficient consideration is given to a structural contribution for corresponding maintenance costs”. At the same time, BZK has instructed the Cft to ensure that the islands reserve sufficient reserves for maintenance and replacement investments.

The current Cabinet has set aside 5 million euros for the exploitation of infrastructure on the BES islands, which in no way offers a structural solution. The Cft therefore urges BZK to make haste with a ‘multi-year roadmap’.