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12.5 percent salary discount withdrawn

The condition of reduction of 12.5 percent on the salaries of the countries of Curaçao, Aruba and Sint Maarten will be withdrawn. This was decided by the Kingdom Council of Ministers today. The discounts were one of the conditions for the countries of Aruba, Curaçao and St. Maarten to receive Corona liquidity support from The Netherlands.

In 2020, the countries appealed to The Netherlands for financial assistance. As a result of the Covid pandemic, a large portion of government and business revenues had been cut. The cut was 12.5% for employees in the (semi)public sector and 25% for political office holders and applied to the total package of working conditions. The cuts made an important contribution to reducing the financial deficit that had arisen, while at the same time demonstrating the public sector’s solidarity with the private sector, which was severely affected by the covid pandemic.

The pandemic has now passed its peak and tourism in the islands is showing a robust recovery. This could bring government revenues back to pre-pandemic levels by 2023. The (Aruba) Financial Supervision Board has advised the Kingdom Council of Ministers, that it is again possible for the countries to meet the budget standards in 2023. As a result, the countries will not appeal to The Netherlands for new liquidity support and can absorb the reduction in their own budgets.

Another condition was the standardization of top incomes in the (semi)public sector. This is now regulated by law in all three countries. State Secretary of the Interior and Kingdom Relations Alexandra van Huffelen: “I am pleased that the countries have created the room for the phasing out of the reductions, because this will bring the incomes of, for instance, employees in important sectors such as health care and education back to the level before the pandemic. This is especially important because the strongly increased inflation resulting from the war in Ukraine is also being felt in the Caribbean part of our Kingdom. Combined with the salary cuts, purchasing power had been severely affected. This particularly affects the lowest incomes and can now be partially reversed.”