Public revenues have fallen by 80%, and costs have risen sharply because suddenly financial support has to be provided to prevent 37 thousand people from losing their jobs. There is no guarantee that there will be money soon to pay salaries, whether for health care or pensions. The government of Aruba is diligently looking for money, in the United States and the Netherlands.
Government costs, especially salaries, must also be reduced. Prime Minister Evelyn Wever-Croes has informed the unions that the government will cut salary costs for the period May-December 2020 as follows: Ministers, officeholders, advisers, and directors of government entities are surrendering 20%. Officials and employees of subsidized foundations and government entities contribute 12.6%. Pensioners of the APFA will give 4.5%.
The structure is as follows:
|Holiday allowance reduction
in June 2020
|Premiums August and
November 2020 reduction
|Ministers||12%||100% (equiv. 8%)||N/A||20%|
|Employees||5%||50% (equiv. 4%)||50% (equiv. 3.6%)||12.6%|
|Pensioners||0||0||50% (equiv. 4.5%)||4.5%|
The government has already met twice with the unions, although there is no consensus, the proposal is supported by the majority of unions under certain conditions, such as:
The cost of living has increased. The government has decided to carry out stricter price controls and to meet with the Port Company and importers to reach agreements. Agreements have also been made with the banks that they will take into consideration the lowered wages, on a case-by-case basis.
Government entities must also make the necessary cuts and the government decided to instruct the entities to reduce costs, A WEVER-CROES standard is introduced, which is a maximum salary for directors of government entities of 130% of the salary of the Prime Minister. This is a structural measure. Besides, salaries will have to be cut during this crisis, as stated above. The fee to the supervisory board members will also be reduced by 20%, although several members have already indicated that they will hand in 100% during the crisis.
The government should cut more costs, especially concerning advisers, and the government has indicated that it has cut substantially from the ministers' offices since the appointment of this cabinet in 2017, with now working with a maximum number of employees and salaries according to the civil service salary scales. With this, Afl. 27 million will be saved. Besides, the government has indicated that almost simultaneously with the outbreak of the COVID-19 pandemic, all ministries and their departments have been asked to keep their expenditure at the minimum for 2020. This means that planned policy proposals and projects will no longer take place in the current year. Article 18 paragraph 2 of the CV1989 (National Accountability Ordinance) and the commitment ban, has been activated. The first round of austerity has also been applied, with Afl. 9.6 million saved, including travel and lodging expenses, expert advice, lease of office inventory, office supplies, training and course fees, leasing vehicles and fuel and business supplies. The Social Crisis Plan for 2020 will be reduced by Afl. 10 million.
This saves Afl. 91 million. As soon as the shelter-in-place is over and the department heads are back at work, they will be able to indicate where further cuts in expenditures can be made. Prime Minister Wever-Croes has not yet reached a consensus, but cannot wait much longer.