Assistant Secretary of the Government Medical Officers Association (GMOA) Dr. Chandana Dharmaratne spoke to Weekend Nation on behalf of himself, Secretary of the GMOA, Dr. Naveen D. Soysa, Editor of the GMOA, Dr. Nalinda Herath, Assistant Secretary of the GMOA, Dr. Haritha Aluthge, Executive Committee Member, Dr. Shenal Fernando and General Committee Member and Branch Secretary of the GMOA, Dr. R. Thanigaivasan regarding their concerns about proposals in the 2017 budget which they deemed would have a detrimental effect on the Government service.
Below are a few excerpts from the interview:
Q: What are the main concerns?
There are concerns in relation to the retaining of professionals in the Government sector, the violation of basic health policies, steps taken to initiate the privatization of Government health services and proposals to open the services market to foreign nationals.
Q: What are these detrimental effects resultant from the budget?
One is the abolition of the time tested and long-standing unfunded non-contributive pension scheme for Government servants which has been there since the time of British rule which is now proposed to be replaced with a contributory pension scheme. This was also proposed in the 2016 budget. This indirectly indicates that the Government wants to go for a different kind of alternative pension scheme, a funded one. This will impact on new recruits to the service in 2017 who will not be eligible for the pension we enjoy.
We believe that the main attraction of the Government service is the pension scheme. Although the private sector pays highly and higher in comparison to the Government sector and professionals might go for it, still others join the Government sector even though the salary is comparatively far lower to what the private sector offers because they get a guaranteed lifelong income as long as they live, following retirement.
Of the 36,000 in the Sri Lanka Administration Grade One category, 18,000 are doctors in the Government sector. This proposal will also result in architects, engineers, chartered accountants and lawyers joining the Government sector less. They will go to the private sector which is much more lucrative and attractive.
The Government service will no longer be able to attract professionals and this will lead to the younger generation going out of the public sector.
Q: Are there any issues with the taxes?
This budget increases taxes on professionals in the Government service. Tax exemptions on allowances have been removed. The Disturbance, Availability and Transport (DAT) allowance and the extra duty payment, the latter given for working over and above the normal duty hours were previously exempt from the Pay-As-You-Earn (PAYE) tax. Now they have been included as taxable income. The ceiling has been increased from about Rs 60,000 a month to Rs 100,000. From the earlier Rs 750,000 up to Rs 1.2 million is exempt. The exemption has been withdrawn. Instead of increasing salaries, the taxable income is more. The transport allowance is given in lieu of official transport and not all doctors enjoy this as Government officials in higher categories of administrative positions are eligible for an official vehicle. Official transport instead of the official vehicle is tax free. Of those who are eligible for a vehicle, some take the vehicle while others take the allowance. With the transport allowance, one has to get a vehicle, pay for the fuel and maintenance and maybe pay for a driver. Now however the vehicle is not taxed but the allowance is taxed, even if an official vehicle is not available.
Q: What about the taxes on employment?
An unreasonably heavy penalty tax has been imposed on the second employment. According to the PAYE tax imposed on income as per the existing PAYE tax structure, the first Rs 100,000 earned is exempt and from then on the first Rs 100,000 is taxed. The equal tier system of the normal tax structure works from 4% to 24%. The first employment is in the Government service. The second employment is private practice in the evening. Up to Rs 50,000 per month is taxed at 10% and if more than Rs 50,000 it will be taxed at a rate of 20% per month. This is an unusually high rate of taxation over and above the normal PAYEE rate. If a doctor gets Rs 100,000 from working in the Government sector and Rs 100,000 from working in the private sector, the Government sector income is exempt, but the doctor has to pay Rs 20,000 as tax per month for the Rs 100,000 income earned from working in the private sector. According to the previous tier system, 4% is for the first Rs 50,000 and 8% for the second Rs 50,000 and so on. Doctors working in the private sector full time who earn Rs 200,000, have to pay a total of Rs 6,000 per month. If a private sector executive earns Rs 200,000 a month, they only have to pay Rs 6,000 as tax. Doctors working in the Government sector are being penalized. The Government pays less than when compared to our capacity to earn. Doctors compensate by spending their precious free time which they can or should spend with their families or exercising in the park, to alleviate the loss incurred from working in the Government service, by engaging in private practice. This is seen as an offence in the budget. A fine has been imposed on working in the Government sector. This will affect teachers engaging in private tuition, engineers engaging in consultancy, architects engaging in private work and State attorneys who are legally allowed to do notary (deed-related) work without appearing in courts in their private capacity. This will lead to the collapse of professions including teaching. They are being taxed at a higher rate. This is unfair. This will result in professionals going away. Our income should be taxed at the normal PAYE rate.
Q:Steps are being taken to issue receipts to patients for the services provided. What do you make of this?
The service we provide, in terms of quantifying the service by way of financial quantification and the quantification of finances, can and should be done. But issuing receipts is not a very nice thing to do. Even in the period of the ancient Sinhalese kings and the British, there was no keenness shown to quantify the service of the free healthcare. Instead of a receipt, the data can be used to audit and make the system more efficient. Hospitals can be audited in this manner.
QWhere do you stand with regard to the proposal to invite the private sector to open a medical laboratory system in the Government service and to establish paying wards?
This is opening free healthcare to private investors and is a step towards privatization.
Q: Five-year multiple entry visas are to be given to investors and their skilled expatriate labour. What is the GMOA’s view in this regard?
This will open the service market for and to foreign nationals. This will cause disappointment and unrest among Sri Lankan professionals and will drive them out of the Government sector and the country. While professionals are being discouraged and made to leave the country, this provides incentive to foreign nationals to work as skilled workers and labour. The result is brain drain. Professionals will veer away from the Government service and the country. On the other hand, this is to facilitate foreign nationals to work here. This is the indirect implementation of the Indo-Sri Lanka Economic and Technology Cooperation Agreement.
If investors are to come, they should come through the Board of Investment. There is no need for a special mechanism. The idea is to generate work, provide employment, bring new technology and disseminate knowledge of new technology among our professionals. Instead, foreign investors will come, set up factories and employ skilled foreign labourers. This will not generate employment. This defeats the purpose. Where do we as a country stand?
Q: What does the GMOA plan to do to address this situation?
We have written to President Sirisena, Prime Minister Ranil Wickremesinghe, Health Minister Dr. Rajitha Senaratne and Finance Minister Ravi Karunanayake. There has been no favourable response. We have conducted protest campaigns, conferences and even held a token strike. We hope that Minister Karunanayake will give a proper response and address our concerns in a constructive manner. They should take our criticisms in a positive light. These criticisms are not anti-Government. We want to help the Government. It is our duty as Government servants, citizens and professionals to point out deficiencies and detrimental aspects in the budget so that the authorities can correct things. We are willing to discuss with them, anywhere and anytime. We will support any rectification of these highly detrimental issues and so that things can continue as before, and the system can be strengthened and improved. The doctors stand to personally gain and benefit financially from the proposal with regard to the health insurance scheme and system. Yet we do not want to act in a selfish manner. We must look at things in a holistic manner. We are ready to help formulate a plan to achieve these things.