It’s that time of year again when the State’s fiscal back-room boys have for months been burning the midnight oil. They have all been busy, computing and totting up the checks and balances before the Government opens up the nation’s accounts for everyone to see. You may have guessed by now what it’s all about. The days are getting shorter as the fiscal winds will soon be blowing in the National Budget 2016 to be tabled in Parliament on November 20.
With every Budget, and non-Budget, the increase in the prices of such commodities by gazette notification has simply become a case of expecting the expected. In Sri Lanka, taxes on citizens can be raised without consultation outside the annual Budget through a so-called ‘midnight gazette,’ literally concocted while citizens are sleeping
Predictably, the reading per-se will not cause any real financial grief to the citizens of this nation. That is because many of the economic burdens have already been inflicted on the people with pre-Budget hikes of certain essential commodities. Already this month the Government increased import levies on three essential commodities such as sugar, potatoes and big onions as well as the most recent tax on imported edible oil.
With every Budget, and non-Budget, the increase in the prices of such commodities by gazette notification has simply become a case of expecting the expected. In Sri Lanka, taxes on citizens can be raised without consultation outside the annual Budget through a so-called ‘midnight gazette,’ literally concocted while citizens are sleeping.
Taxes have been imposed on even certain basic necessities such as essential foods outside the Budget, a practice which became widespread of late, worsening the uncertain lives of the citizens. And it goes on regardless despite that fact that such a gambit is a fundamental violation of the principle of ‘taxation by consent’ practiced by free countries.
This detestable fiscal policy is usually implemented ahead of the reading. As usual the price hikes will remain craftily concealed during the actual presentation. And the facile excuse propounded by all finance ministers of late has been that the increased levies on imported commodities were intended to protect local producers.
Yet another thing appears quite predictable about Sri Lankan Budgets over the last few years. And this year has been no exception with the pre-Budget ‘sin-tax’ increases on tobacco, alcohol and beer. Indeed it came as no surprise when the on the price of a cigarette was jacked up by Rs. 3 and the excise duty on liquor hoisted to unaffordable levels as well.
That had been a certainty given the predilection of all finance ministers to resort to an ‘easy come’ source of revenue, forcing smokers to resort to the more hazardous ‘beedi’ and the illegal and dangerous gut-rotting moonshine, ‘kasippu.’
Now if I had a suspicious mind, which fortunately for the political fraternity I don’t, I may have surmised that some of our lawmakers profit quite handsomely from the illegal hooch trade. If, only they are made aware of the damning derisory toasts raised in their dishonour by irate tipplers.
However, all these duplicitous measures will have a direct bearing on the cost of living and, in turn, the quality of life and health for ordinary Sri Lankans. The common man is more preoccupied with the unbearable increases in the prices of food, fuel, travel and other essentials while faced with the daunting prospect of day-to-day survival.
Even those who seemed relatively comfortable a while back are now splashing around frantically to keep their heads above the inflationary waterline. People who not long ago purchased essential items by the kilo are now constrained to penny-pinch and buy by the gram.
It is also true that our economy has been crippled by corruption, politicization, nepotism and a bloated bureaucracy. Anyone who says otherwise is either a fool or liar, or possibly both. These are also the gloomiest times for the consumer made even darker by the people’s disillusionment of successive governments that have failed miserably to live up to expectations while reneging on grandiose promises in their election manifestos.
Our nation is facing a frightening crisis of governance. It is patently clear that there is little or no accountability in stewardship. Everyone is aware that corruption and the criminalisation of politics have reached unprecedented levels. At any rate, that has been the rule rather than the exception, because the politicians impose austerity on the many while lining their own pockets and those of their fat-cat cohorts in an often monopolistic market.
For instance, how can anyone justify the country’s depleted coffers being emptied to pay off credit lines for personal duty-free vehicles for all those ‘honourable’ MPs? Remember, there are 225 of them in all, and every one of them campaigning on a platform of budgetary caution and austerity. Of late, they have been spending too much time in attempting to convince the people to swallow tough economic medicine, without even sugaring the pill.
Eventually, the country will have to confront the deficit we have, rather than the shortfall we imagine. The one we have is a deficit caused by waste, fraud, abuse and vague out-of-control spending. And the colossal costs incurred for the upkeep by of the gargantuan Cabinet will certainly not help in the cause of bridging the deficit.
Neither of our big party governments has had a coherent vision for poverty eradication. Priority concerns such as basic social services, welfare, education, housing and health care have been left unaddressed. But the government says it is optimistic of better times ahead. The only way to be optimistic about our nation’s economic future at this stage is to look at the charts upside down.
Everything at this point calls for harsh budgetary measures in an effort to bridge the colossal Budget deficit, generate more revenue, curb expenditure and honor both staggering domestic and foreign borrowings.
There has to be enormous cost-cutting in public spending and a complete clean up and overhaul of the totally mismanaged state sector enterprises which are laboring under a mountain of bad debt. Slashing government spending and ending the incalculable waste will help decrease criminally profligate state expenditure to a remarkable degree.
If anything, it illustrates the loose financial and other controls that characterize the world of our state enterprises. The Government must not be seen to display leniency and indecision in situations that require prompt, tough action and remove the sycophantic corrupt scabs heading them. In short to bridge the budgetary gap they should short shrift the scab and slash the flab.