The Kingdom Council of Ministers has approved the proposal for the Kingdom Consensus Law durable government finances Aruba (Rijkswet HOFA). As a result, the internet consultation for the law proposal can start. With the Consensus Kingdom law, Aruba, in collaboration with the Netherlands, will work on maintaining solid government finances to also be able to make sustainable investments in the country’s future in the long term.
The Kingdom Consensus Law goes hand in hand with the National Ordinance safeguarding durable government finances (Lwho). This is a national law of the country Aruba in which the Aruban government budget norms are included. These norms are based on guidelines of the International Monetary Fund (IMF) and contribute to keeping the expenditures in balance.
State Secretary of Internal Affairs and Kingdom Relations Eddie van Marum is content with the achieved result: “That we have a law proposal marks an important step in the collaboration between Aruba and the Netherlands. It is an example of how good and constructive cooperation can lead to a result that everyone can be proud of. With attention and respect for each other’s stand points, we have a proposal for a Kingdom Consensus Law that is in the interest of both countries. Aruba takes responsibility for the financial management and gets more room for making investments in, for example, education, care and economy.”
Prime Minister Mike Eman: “The completion of this agreement is an important investment of the Country Aruba in its reliability. A reliability that has to form the basis for a lasting relation within our Kingdom, with a renewed vision aimed at strategic collaboration in striving for the Common Good of Aruba, the Netherlands and the entire Kingdom.”
Budget norms
The Kingdom Consensus Law durable government finances Aruba regulates the norms for achieving and maintaining durable government finances. It also regulates the manner in which the Kingdom Council of Ministers supervises Aruba’s government finances. The Board Aruba Financial Supervision CAft will keep advising both Aruba and the Kingdom Council of Ministers within the financial supervision framework. This advisory role is of a temporary nature and lapses when Aruba complies with the norms. A Budget Chamber, to be established by Aruba, will then take over the role of the CAft.
Lower interest on loans
The Kingdom Consensus Law has many advantages for Aruba. Aruba over time will be paying a lower interest for loans that it obtained from the Netherlands during the COVID-pandemic and the Netherlands is willing to refinance the loans that Aruba has on the United States capital market. Aruba can then use the interest that it saves for investments in its own country. In addition, it will become possible for Aruba to make use of favourable conditions that the Netherlands has in the tendering of loans. In this manner, it becomes possible for Aruba to contract capital loans with a lower interest to make public investments. This limits Aruba’s debt burden.
Aside from this, Aruba will include additional provisions in its own, national legislation. When the Kingdom Consensus Law comes into effect, Aruba will establish its Budget Chamber, as an advisor to the Aruban Parliament and the government. Upon the expiration of the Kingdom Consensus Law, the Budget Chamber will take over the position of the CAft. Changing or enacting of the national legislation can only take place with the approval of the Kingdom Council of Ministers. The Kingdom Consensus Law proposal states that during its term the working of the law will be evaluated every five years.
The internet consultation can be found via this link:
https://www.internetconsultatie.nl/rijkswethofa