Janatha Vimukthi Peramuna (JVP) MP and Chairman of the Committee on Public Enterprises (COPE), Sunil Handunnetti speaks on the pros and cons of the budget and its impact on the country’s economy.
Q: Now that the budget has been presented and there is much critical analysis of it, what would be the fate of the people?
One family has to bear an additional cost of Rs 15,000. The budget has not been created with any interest towards the people, but only the interests of the Government. It is a budget which seeks to find the finances for the daily expenses amid crises. At the very least, this budget will not succeed in mitigating the crisis for even a month.
Q: Can you further analyze the budget?
The budget can be divided into three aspects. The first involves pleasing the International Monetary Fund (IMF) and selling what is left as far as Crown land, State enterprises and establishments are concerned. The second involves burdening the public to their limit with tax. The third involves taking all the funds with the exception of the pension fund collected from the monies of the people and placing them under the purview of the Treasury.
Q: Why is the JVP describing this budget as an IMF budget?
They are the main advisers. This was the case with the previous Government. The same is the case now. Since the day the country started taking loans, this has been the system. Moving away from social welfare is one of the conditions imposed on the Government. They have advised the Government to release enterprises and the management of assets such as property from the Government’s purview and to release even the distribution of water to the control of the private sector.
Q: Every Government that comes to power increases the taxes and attempts to bridge the budget deficit. Are there no other methods of bridging the budget deficit?
Other than taking loans, the Government states that there is no other alternative. However, there are alternatives. One way is to place faith and trust in the country’s production process and formulate plans in this regard. According to the process followed by the Government, relief is provided only to foreign investors and only to the privileged. The people have to shoulder the burden. Apart from having to earn a living for them to survive, the people of the country in addition have to earn to keep the Government alive. Once they give the Government what they earn, and if there is anything still left, monies could be allocated for the purchase of medicines for illnesses and for the receiving of an education. Today, it has been made mandatory for the people to maintain the Government and for the Government to earn without any division on the basis of political parties.
Q: Doesn’t the foreign exchange spent on importing food stuffs and other items impact the local economy?
Yes. These have to be restricted and we have to move towards producing food stuffs locally and thereby towards a production-based economy, the benefits of which will go to the people. If one looks into who steals the largest portion of the country’s national wealth, and one takes measures to prevent corruption and fraud, the Government can earn an income a thousand times over than what they can earn through the tax revenue obtained via the fines increased in the budget.
Q: What is the analysis of the depreciation of the Sri Lankan Rupee?
This impacts greatly. According to the CBSL reports presented in Parliament, for the past seven months, for foreign loans we have had to spend an additional Rs 141,000 million. This is the unwelcome consequence of the devaluation of the Rupee. For the loans we obtained previously in US dollars the country has to pay the said amount. This is a question in relation to obtaining loans. Due to this, when the Treasury purchases bonds via the CBSL, the loss incurred for discounting the price is Rs 70,000 million. Once one adds up the two, the value is Rs 2,110,000 million.
Q: According to what the Government states, the increase in the fines for motor traffic related offences has not been done with the intention of earning money. They say that it is to instill discipline when using roads. What is your view of this?
Previously too, fines were charged with regard to road offences. How many of those from among the number of vehicles on the road daily, who violate laws, get caught. Enforcing laws, without taking into account the competitive lifestyle of the people today and without thereby providing them with the required facilities for their vehicles or establishing the needed facilities, constitutes an attempt to increase the tax burden on the people and earn an income. If fines are being charged for making it mandatory to follow and abide by road rules, why are they being charged as spot fines? This is being done because it takes a lot of time to go to the post office and pay the fine and come back.
Q: Could you explain how the increased airport tax will impact the country’s economy?
It is our migrant workers going overseas who would be the most adversely affected by the tax levied from airline passengers. On one hand they are calling for foreign investors, on the other they increase the tax imposed on airline passengers.
Q: The Government states that agriculture and the farmer have been strengthened through the budget. Is this in fact the case?
Forget farmers, not even a single farmer has been strengthened. The budget’s proposals state that a farmer would be given a minimum of 1000 acres. This is not for the local farmer. This is for the commercial farmer. Are there farmers in this country who can farm 1000 acres? This invitation is to multinational companies.
Q: How do you view monies coming under Ministries being taken under the Ministry of Finance?
This is a very serious situation. Cess funds contain monies for the development of industries such as tea, rubber, coconut and gems. All funds with the exception of the foreign employees’ welfare fund and the pension fund have been taken under the Treasury with immediate effect. This is not for the purpose of safeguarding the funds. This is to pay off the loans. This is to appease the whims and fancies of wasteful Ministers. This is as a solution to the crisis concerning the lack of money. What will happen now is that the industries will experience breakdowns.
Q: In your opinion, who must be held responsible for this situation?
The group in blue and green that has ruled the country since. The country gains no benefit from this process of switching one party for the other. This kind of budget can be approved by getting the Parliamentarians who fall asleep in Parliament to raise their hands. Yet, this has already in the face of opposition from the people, been defeated.
Q: Didn’t matters concerning COPE get swept under the carpet by the budget?
Thefts will never go under. The entire responsibility regarding the CBSL bonds scam rests with the Parliament. The duty of COPE in this regard is now over. We are now looking at the conduct of the Government with regard to fulfilling its duty. We will never allow this to be swept under the carpet.