Finance Minister presents 2026 budget, says St. Maarten is moving to policy-based budgeting

GREAT BAY--Minister of Finance Marinka Gumbs presented the draft 2026 National Budget to Parliament today, describing it as a major shift in the way government plans, allocates and accounts for public funds.

In her opening remarks, Minister Gumbs acknowledged that the budget was presented later than it should have been and took responsibility for strengthening the process going forward. She said the delay reflects long-standing structural and political challenges in St. Maarten’s budget cycle, but stressed that government has used the 2026 process to identify bottlenecks, improve coordination and change the way future budgets are prepared.

“This budget is being presented later than it should have been,” Gumbs told Parliament. “I offer no excuses, nor do I seek to assign blame. I take full ownership of my role and responsibility as Minister of Finance, as well as my responsibility to strengthen the system that governs the preparation and submission of the national budget.”

The Minister said the 2026 budget marks a historic milestone because it is the first national budget prepared under a policy-based budgeting approach. She explained that government is moving away from simply listing expenditures such as salaries, rent, utilities and office supplies, and is instead linking public spending to policy objectives, measurable results and expected outcomes for the people of St. Maarten.

According to Gumbs, the new approach shifts the focus from inputs to impact. She said it gives Parliament clearer tools to assess whether government is delivering on its promises, while giving the public a clearer view of how tax revenues are connected to national development and public services.

“For the very first time in our nation’s history, the national budget has been designed and organized around a policy-based budgeting approach,” the Minister said. “We are no longer simply presenting expenditures. We are explaining why resources are being allocated, what concrete outcomes we expect to achieve for the people and how every guilder aligns with our strategic policy objectives.”

Under the new policy-based approach, Gumbs said government can now show Parliament how allocations translate into ministerial priorities and societal outcomes. She said the consolidated ministerial budget of Cg. 608 million is distributed across the seven ministries, allowing Parliament and the public to better understand where government’s focus lies.

The Minister emphasized that a budget is not only a spending plan, but also a tool for national resilience. She said the 2026 budget addresses structural weaknesses that have affected liquidity for years, while continuing the roadmap to improve financial management and move the country toward an unqualified audit opinion from the General Audit Chamber in the coming years.

For the first time, she said, maintenance budgets are being linked to a comprehensive national asset inventory. Gumbs said this is intended to prevent government from building infrastructure and public assets without properly planning for maintenance afterward.

“We will no longer build things only to let them deteriorate due to a lack of planned maintenance,” the Minister said.

She added that the capital expenditure programme for 2026 is strictly reserved for projects that provide an economic or social return on investment.

Gumbs also acknowledged Member of Parliament Ardwell Irion, under whose tenure as Minister of Finance the transition to policy-based budgeting was initiated. She said that earlier work laid the foundation for the reforms now being continued.

The Minister told Parliament that the 2027 budget process has already started months earlier than in previous years. Ministries, she said, have been engaged well in advance, and the structures are now in place to support more timely preparation and submission of future budgets.

Turning to the country’s economic position, Gumbs said St. Maarten’s economy has shown resilience but remains vulnerable to external shocks, including global instability, oil price movements, inflation and climate-related risks. She said government is not relying on windfalls or higher tax rates, but is focusing on widening the tax base, improving compliance and modernizing tax collection.

The 2026 budget projects total revenues of Cg. 646 million and operating expenditures of Cg. 636 million, resulting in an operational surplus of approximately Cg. 11 million. The Minister described it as a balanced and healthy budget.

The budget also includes Cg. 164.6 million in capital investments for 2026, with total commitments across all frameworks reaching Cg. 632 million. Gumbs said government intends to handle these investments transparently through targeted capital borrowing and investment tools.

“We are borrowing strictly to build, not to cover operational waste,” she said.

Gumbs also addressed the country’s debt position directly, saying an honest assessment of public finances requires government to confront questions about whether St. Maarten can afford its debt and whether the country is borrowing responsibly.

She told Parliament that St. Maarten’s debt-to-GDP ratio is projected to edge down slightly to 41 per cent this year, compared to 43 per cent in 2025. In international terms, and especially within the Caribbean region, she said a debt-to-GDP ratio below 45 per cent is considered stable and manageable.

However, the Minister cautioned that manageability is not an excuse for complacency. She said the country’s debt remains manageable because St. Maarten has maintained access to favorable financing and because the economy is projected to continue growing by 2.4 to 2.7 per cent.

Gumbs noted that the Central Bank of Curaçao and St. Maarten has warned that St. Maarten remains a small, open economy exposed to external oil shocks, global inflation and climate realities. A major storm or a decline in global tourism, she said, could quickly affect the country’s fiscal position.

The Minister said the 2026 budget explicitly accounts for debt servicing obligations, including interest related to capital investment loans, within the Cg. 636 million operational expenditure framework. She said government is fully compliant with the interest expense standard set by the Board of Financial Supervision, Cft.

Gumbs also said government is changing the way it manages capital borrowing. In the past, she said, government borrowed money for capital projects and funds sometimes remained unused for years while interest was still being paid. She noted that the Cft has repeatedly criticized St. Maarten for this practice.

Under the new approach, she said, the new Cg. 42 million investment loan will be tied to strict annual project timelines.

“We are sending a clear message to our partners in the Kingdom and to the Board of Financial Supervision,” Gumbs said. “St. Maarten is no longer borrowing to cover up operational inefficiency. We are managing our debt with the discipline of a developing, mature state.”

The Minister stressed that she was not presenting the budget as a perfect document, but as an honest one that recognizes past shortcomings while setting a new path for public financial management.

She said the 2026 budget breaks with the practice of simply copying previous years’ line items and instead introduces more discipline, purpose and accountability into the budget process.

“This document acknowledges where we have fallen short in the past while boldly charting a new path for how public finances are managed in St. Maarten,” Gumbs said.

Minister Gumbs closed by calling on Parliament to engage in a constructive debate focused on improving the country’s financial direction rather than political point-scoring. She said the budget should serve as a tool to refine a shared vision for a more transparent, accountable and responsible St. Maarten.

Before beginning her budget presentation, the Minister also expressed condolences on behalf of the government and people of St. Maarten to the people of Venezuela following devastating earthquakes that claimed lives and caused major destruction.

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