The Sunday Leader


Excerpts of UNP MP Eran Wickremaratne’ s speech in Parliament on the Budget

This is the problem we face today. Here we are, debating about a budget. But regarding the two provisions which I mentioned above, even the Supreme Court itself has ruled that it is contrary to the Constitution. So I wonder, are we discussing about a bill which is contrary to our own constitution? Therefore there is a need to know whether this debate is fruitful at all. We have continuously requested to establish a Budget Committee in the Parliament. Then we can discuss about the budget proposals, expenditure and debts in a broader way. We can summon experts and by discussing these with them we can create a better control over stare finance despite political differences. This is the fourth time I mention this in this Parliament.
I’d also like to say a few words about some of the proposals presented in this year’s budget. When the last year’s budget was presented, we were told that the income is going to be increased by 18%. But the truth is that the income has not been increased by 18%. It has been increased only in 10%. However, we were continuously told that the Budget deficit is going to be 6.2 as expected. But I would like to know how it is possible if there is such a decline of income. Not even this, when the budget for this year was presented to us last year we were told that the  Budget deficit is 6.9 and it is going to be 6.2 this year and 5.8 next year. But the truth is that this is not the total Budget deficit. We are aware about the agreement the Government has with the IMF.
In July 2012 the Government and the IMF signed a document. And in that document it is clearly mentioned that the true Budget deficit in Sri Lanka in 2011 is not 6.9, but 8.6, because it is mentioned clearly that the 6.9 was calculated without taking the losses of CEB and Petroleum Corporation into consideration. What I need to say is this. The true Budget deficit in a country can be disguised in many ways. But here we have to talk about the health of the country’s economy. No matter how it is hidden, if the economy is having fever, it is having fever.
This is the question I would like to ask. Did the Finance minister reveal these? The Hon. Minister, without explaining anything, kept on saying in his speech that the Budget deficit is going to be 5.8. But I don’t know whether he is aware of the fact that this is calculated without taking the huge losses incurred in some state institutions in to consideration.
Mentioning about the income he said that some taxes will be lowered and abolished. But in reality there is no difference between direct taxes and indirect taxes. Indirect tax 80%, direct income tax 20%. Nothing has been changed. The plight goes to the people who are in the low income level. Because they too has to pay the same ransom as the rich do. When they buy a kilo of potatoes and when they buy kerosene oil they have to pay the same tax. It must be noted that the tax is very high relative to their income. We are told that the tax system is being simplified. If so there must be an increase in taxpayers. We are told that the low income rate has been decreased from 15% to 10%. Then too there must be an increase in tax payers. Even that has not been done.
Like Hon. MP Harsha is pointing out, I too have to ask why 1% of the population is given so much of relief while the people are not. Why don’t you increase the income tax? In Denmark the income tax is 56%. Netherland 52%, Australia 45%, China 45%, Japan 40%, India 30%. It is Sri Lanka who has the lowest income tax in the world. When the gap between the incomes is getting higher and when the poor are being trampled, I would like to ask why we cannot increase the income tax like the rest of the world. Even some of the Govt ministers have asked the same question. I know that you can’t question the president when you hold the chair.
(Quoting about the president in Uraguwe) This president is a good example for the whole world. I wish to have such a president in Sri Lanka too. Some MPs and ministers who are listening to my speech here now could become presidents in the future. But someone like Mujika and Mahathma Gandhi is born to this world only once a hundred years.
This budget has given an allowance of Rs. 750 per month. The 5% pay hike is given in two installments both in May and September. For the monthly income is between Rs. 20,000 to Rs. 40,000, the hike would be 4% to 7%. But our household survey shows that if a family of four had a monthly income of Rs. 35,000, in 2006 39% had to be spent on food. But now it has increased to 43.2%. From this we can see that the increase in the prices of goods is relatively faster than the increase of income. This does not affect only to the government servants. When people are tied in to the government service for lower wages it affects the private sector too. The businessman always tries to keep his fair share of profit by limiting the worker’s income. Some are trying to put labels on our Economic policy. But we do have a radical economic policy. And it is that policy our leader has already mentioned about. Therefore we say that 50 rupees per day for an employee is not enough. People are recruited for the government service for lower salaries. And they work with their life for the Government. It is not only their income which is now at stake. We have several times pointed out in this chamber how the government has misused the EPF and ETF though share market investments in 2009 and 2010.
If we look at this year’s budget, there is a massive deficiency of 500 billion Rupees. And when it is inquired it is clearly mentioned that debts will be taken locally rather than from foreign states. I would like to ask what the reason for this policy shift is. It may be because it is difficult to get further foreign loans. But when it is mentioned that there will be local loans, at the same time it is stated the loans will be taken from non-bank sources. And that is where the working class in Sri Lanka gets hammered. For it is said that the non-bank loans are to be increased by 86%. By what means such an amount of loans can be taken? It goes from 259 Billion to 421 Billions. And the Non-bank loans from 86 Billion to 289 Billion.
The government has used the tactic in a clever way. What is going to happen now? This year there will be no investments in the stock market. Instead, the government is going to get the loan from the Providence fun at a low interest. That is how this is going to happen. According to the fundamentals of Economics if loans are to be taken the interest should be increased or decreased relative to the need. But now, to control that the government is trying to exploit the EPF and ETF. It is not only the existing income which is beaten up by the budget, but also the future income as well. So the government servants are trapped in this.
There is a big collapse in the state enterprises. In 2011 the loss of CEB is 19 billion. In 2012 it’s 44 billion. Petroleum Corporation, 2011, 85 Billion. I tried to find out the total loss of it for this year through the research section in the Parliament but we did not get it. But we can imagine the loss compared to the 85 Billion last year. Now this includes the Hedging payments and its interests as well. No need to mention about Vehicle Fuel or out of date utensils at Norochchole Power plant. I am telling without them. Think about the fairness of this. In this country 1.8 million families depend on Samurdhi allowance. And they are given only 7 or 8 Billion per year. But the Sri Lankan Air Line alone records a loss of 17 Billion per year. If this is the welfare economy of this country I would like to ask whether this is fair.



    Well written Eran, with facts. More people need to have a spine and stand up for the sake of the country and the conscience of Man. EVEN if it comes to having an uprising…. a peaceful one…

    It is sad that despotic rule and callus regard to the Economy of the country and the poor, are further marginalizing our people towards abject poverty and even to rebellion and robbery [robbing the wealthy of their wealth]

    Delayed Justice in our judicial systems continues.

    More Humane and courageous Law makers [Honorable legislators] and Judges should emerge to get justice done in this Nation.

    Only Godly Christians who uphold Biblical Righteousness can do this. PCS

  2. tony

    This is a fair analysis of our economy. We are borrowing to pay interest of other loans. Loans, loans loans. There was no mention of cuts in government waste. This government is going for development in a large scale. Development is good. So far most of our development projects had been in outright or partial gifts. No one knows how much was spent on these development projects, the actual costs, and how much of donation did we receive against these expenditure. There must certainly be lots of benefits for some of the ministers on these projects

  3. Living the dream in the Might West

    All this development is not happening. Colombo is still a dirt bin and over 90% of the population is living under the poverty line. I visited your country recently and was shocked to see the beggars, people dying of deceases like dengue. It is a shame. Thankfully I left your country many years ago and now living my dream in the west.

    • prado

      What a idiotic comment! Iam sure you are still in SL or a LTTE sympathizer living in the west washing dishes. No one who live in luxury say so but only those who don’t have try to exaggerate. I have seen beggars worst in India & most Asian countries & in London /newyork / Africa etc,… beggers die in London for the cold (skynews). More over people here in middle class have maids /drivers & enjoy other luxuries with the west only a very small percentage can afford. The west has fallen with the recession enough beggers in Italy /Poland etc… little knowledge is a dangerous thing!!!!!! Ha ha!

      • Neela M

        Prado, I think you are sadly mistaken. From a wold standard, SL does not have rich people I live in SL but have visited many western countries and the poor people there will be considered rich or middle class in SL.these days. Our economy is being driven by loans from anyone who is willing to lend us money on very high intererst. It will take generations to pay this off, if ever that happens. Unfortunately we have to accept the truth that SL is a poor country and it is getting worse. Only lesss than 1% can afford to live comfotably. Most people are suffering in SL. Sadly this is the truth.

    • Don

      Hello “Living the dream in the Might West”. People like you should not even vist Sri Lanka. If some one can ridicule his own country just because he found greener grass on the other side, he is not worth to be called a man. So, don’t bother in future to visit here. You can rot in the hellhole caleed west forever!

  4. Pat

    Well said. But unfortunately, the people who are reading the English newspapers in Sri Lanka already know about these things. You have to take this message to the village level, who still are not updated on these matters. None of the opposition parties are strong enough to do that. You need to find a way to get your message across.
    Most of Sri lanka support the Government. whatever you say.

  5. laksiri

    great analyst and ii is important to add few more points.if we need to reduce this deficit ,we have to cut the Goverment administration cost ,just to manage small country size is even small than west Virginia.state.we do not need provincial council.if we thinks we do need that we only need each section senior secretary who is responsible to report the parliament or to the president. in this way each province need to manege subject matter. Parliament can appointed the committing to sup revise the progress.each committee can have all parties members.all the supreme court appointment must be refer to the judiciary committee of Parliament before appointed .if we follow this simple principle,we can cut our political administration cost by SLR300 B per year.them we need to re-structure of management all loss making institute under private sector or the Goverment control to make it profitable. we have to reduce wasting of too much of money on foreign service and better understand that what level of diplomatic service can be take care by this small nation.not just some of the political appointments need to be financed by poor people who do not have basic needs.if not you all can see new Greek in Asia and Asia wounder will go for declare of bankruptcy soon than later.

  6. tilak

    Good question ?????? and when U come to power avoid this situation.

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