WILLEMSTAD - The Committee for Financial Supervision (Cft) has expressed its concern about the significant increase in civil service salary costs in Curaçao for the year 2024. The budgeted personnel costs for this year are much higher than expected in 2023, with a budget of 503 million guilders, representing an increase of 63 million guilders compared to the previous year.
This increase is mainly due to the indexing of salaries for civil servants and people in similar positions, as well as the granting of salary increases and one-time bonuses. In addition, an amount of eighteen million is reserved for the year 2024 to fill 223 vacancies, many of which were already included in the 2023 budget. However, filling these vacancies remains a challenge.
Inflation
The Cft considers it particularly risky that Curaçao is significantly increasing personnel expenditure while there is also a structural increase in expenditure on goods and services. The latter is partly due to an inflation correction of about eight percent, while an inflation of about three percent is expected for 2024. The Cft advises reconsidering the size of the inflation correction and finding ways to reduce spending on goods and services.
Furthermore, the total expenses for indexing and salary steps will increase from 51 million in 2023 to 94 million in 2027. Transfers to special education also increase due to indexing. According to the Cft, this increase contradicts the objectives of the Voluntary Early Exit (VVU) and the measures in the Country Package aimed at rationalizing the civil service.
Note
With a Change Note, Curaçao has increased the burdens by a total of sixty million compared to the earlier draft budget for 2024. These increases include interest expenses (47 million more), personnel expenses (28 million more), and transfers (six million more).
As a result, total expenses in 2024 will increase by 156 million, from 1,746 million in 2023 to 1,902 million in 2024. This increase is mainly explained by higher personnel costs, increased use of goods and services, higher interest expenses due to the refinancing of the liquidity support loan, and higher subsidies and transfers.