Aruba With Less Tax Revenue … Lower the Budget and end the Civil Servant Nepotism Positions

What are the results of a continued downward spiral of tourism on Aruba? Civil servant fluff positions must go to help balance the Aruban budget. All a result of the continued lack of tax revenue coming in from a depleted tourism industry. Aruba has had for quite some time an issue with a glut of civil servant positions hired as “political favors”. However, it is only now that Aruba is feeling the squeeze from the lack of tourism dollar that they now must address the issue to balance the budget.

The number of civil servants has increased enormously since 1986; especially the public order and safety sector grew the most. (You must be kidding)

ORANJESTAD – In order to create a balance in the government receipts and expenditure in 2009, the current increase in personnel costs has to drop with more than 60 percent, and the debt quote has to drop to about 40 percent of the gross domestic product (BBP).  Those are the most important conclusions of the national committee public finances that were presented in a final report to the minister today.

I wonder why they can’t pay for the old budget expenditures?

What a surprise that we learn that Aruba when compared with other countries it appears has the highest expenditures in government personnel. What a scary thought that one of the sectors that had growth in civil servant positions was public order and safety. What do they actually do? Or is that the point, these people are hired and are just a drain on the system.

Welcome to the reason why balancing the budget now requires cutting jobs in Aruba … The new face and logo for Aruban tourism.

The report shows that especially the high personnel costs is driving the government expenditures up.  The committee has compared these with other countries and it appears that Aruba has the highest expenditures in government personnel, namely 2760 dollars per head of population against an average of 1400 dollars (12.5 percent of the BBP).  Besides, the costs have increased with 10 percent in the past five years.  The number of civil servants has increased from 2778 to 6576 since the status aparte of 1986.  It grew the most in the sectors public order and safety, and education in the period 1986-2005 (58.4 percent).

Amigoe, February 9, 2007: Government personnel costs have to drop drastically 

The number of civil servants has increased enormously since 1986; especially the public order and safety sector grew the most.

ORANJESTAD – In order to create a balance in the government receipts and expenditure in 2009, the current increase in personnel costs has to drop with more than 60 percent, and the debt quote has to drop to about 40 percent of the gross domestic product (BBP).  Those are the most important conclusions of the national committee public finances that were presented in a final report to the minister today. 

The minister of Finance and Economic Affairs, Nilo Swaen (MEP) established this committee last year in May to assist him in his policy and ambitions in the field of government finances.  The committee consists of the Aruban Investment Bank (AIB Bank) with representatives of the ministry, the Central Bank Aruba (CBA), Social Economic Council (SER) and a government official of the Dutch ministry of Finance. 

PERSONNEL

The report shows that especially the high personnel costs is driving the government expenditures up.  The committee has compared these with other countries and it appears that Aruba has the highest expenditures in government personnel, namely 2760 dollars per head of population against an average of 1400 dollars (12.5 percent of the BBP).  Besides, the costs have increased with 10 percent in the past five years.  The number of civil servants has increased from 2778 to 6576 since the status aparte of 1986.  It grew the most in the sectors public order and safety, and education in the period 1986-2005 (58.4 percent).   

CONTAIN

The committee concluded that the government has to contain the growth of the personnel costs, from the current 6.3 percent to a maximum of 3 percent on annual basis.  The committee also recommends a core task analysis.  The government has already primed this project and it is expected to be finished off in July.  The government must not hire extra personnel until this analysis is done, says the committee. 

Other than a core task analysis, the government can also use other instruments to restrict the growth of the personnel costs, like cutting back the fringe benefits and a more efficient management.   

Also the government debt has increased considerably in the past five years.  The 38.4 debt quote in 2000 increased to 46.1 percent BBP in 2005.  The debt increased from 1.3 milliard florins to 1.9 milliards.  The committee recommends taking the government debt back to a maximum of 40 percent of the BBP.  Despite the government debt and the expenditures for personnel, the total spending of the government remained stable in the past six years, about 18 percent of the BBP, but it is still higher compared to other countries.