One topic that keeps reoccurring the last few days is that of the 12.6% cut in public employees’ salaries, how much money this cut actually accounts for, and where the money is going. These questions were answered during the ‘Uitvoeringsrapportage URK’ which contains all the plans for Aruba’s budgeting, including information concerning the 12.6% salary cut.
How much money does this salary cut entail?
In attachment 2 of the URK3 of the year 2021, you can read, on page 44, that the 12.6% cut in the first quarter of 2021 accounted for 7.8 million, 9.8 million in the second quarter, and 11.5 million in the third quarter. This is what the public sector handed in every quarter to be able to comply with the conditions that the Netherlands set up each quarter to ensure we met our budgeting goals.
Where did the money go?
Aruba’s economy has not recovered completely yet. Because of this, the government does not have sufficient funds to cover all its costs. Compared to 2019, the government has a 271-million-florin gap, which will not be resolved in the year 2022 due to the state of the pandemic. Aruba is receiving financial aid from the Netherlands to help close the gap. One of their conditions for helping us is this 12.6% cut in the salaries. The pay cut is a condition, therefore, if it is not met, we do not receive any financial aid and will not be able to pay any salaries at all. The pay cut is a sacrifice that the Netherlands wants to see met if we wish to continue borrowing their money.
How long will the pay cut last?
As long as Aruba’s economy does not recuperate fully and we have to keep relying on the Netherlands for financial support, we must continue complying with their requirements. The sooner we recuperate, the fewer sacrifices we will have to make and ensure this cut will become a thing of the past. Until now, Aruba has borrowed 1500 million from the Netherlands, which includes the money used to repay our international debts in 2021 and 2022.
