The first government of St Maarten-the island became independent on October 10th 2010-is facing many fiscal challenges which have brought it into conflict with the unions. The coalition between the Democratic Party (DP) and the newly-formed United People's party (UP), which is still struggling to set a budget for 2011 (see Economic policy) had to announce a rise in the sales tax to increase tax revenue last December-the sales tax rise came into effect in February. According to the minister of finance, Hiro Shigemoto, this was necessary because the tasks and responsibilities of running the new country would cost 30% more than had been anticipated. He complained that the budget provided by the government of the Netherlands Antilles Federation had allocated insufficient funds for the required investment in the workforce, knowledge base and infrastructure, or for the operational costs of running the new country.

The government's attempts to consolidate the fiscal accounts have brought it into conflict with the civil service unions. The main issue is the outstanding payment of cost of living adjustments dating back to 2006. The Windward Islands Civil Servants Union/Private Sector Union and the Windward Islands Teachers Union demanded that the government honour the Federation pledge to pay the outstanding amount in full, while the new St Maarten government argued that it did not have the funds. Instead it offered to make a part-payment to be followed by the remainder at a later date. Following a number of offers tabled in January and February, all of which were met by union threats to strike unless the full amount was paid with immediate effect, an agreement was eventually reached to pay the workers the outstanding amount in July. However, a final settlement remains pending until the 2011 budget is agreed.