9th November 1997


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GL’s Budget bouncers

The budget propos als for the coming year were presented by Deputy Finance Minister G. L. Peiris on Wednesday amidst high hopes and a high-pitched din by members which led to Speaker K. B. Ratnayake lamenting the next day that behaviour in parliament was going from bad to worse.

What the Minister called ‘a people’s budget’, the Opposition gleefully mocked as the ‘yarn and bamboo budget’ — comments the Minister chose to ignore. Despite the regular interruptions, remarks and hoots, the bespectacled Minister trudged on, while the Speaker spoke out time and again to restore proper parliamentary decorum.

There was an air of expectancy in the house while the media gallery was a hub of activity. Women members and officials, including Deputy Secretary General Priyani Wijesekera, were more formally dressed. On the Opposition side, there were many empty seats. Perhaps the live telecast of the Sri Lanka Vs. Pakistan match was more entertaining and important than the budget batting and bouncers of GL, a wag in the gallery quipped. Even the media gallery which is usually packed to capacity had several empty seats. In the public galleries, children were seen seated among some officials, including BOI Chief Thilan Wijesinghe and Rupavahini boss D.E.W. Gunasekera.

At 2.26 p.m. Prime Minister Sirimavo Bandaranaike was wheeled in by two Parliament workers. Clad in a gold and mustard osariya, she chose to occupy a back seat next to MP Dilan Perera.

Many members were seen taking time to greet the grand old lady of Sri Lankan politics.

Business for the day began when Speaker Ratnayake called the House to order at 2.30 pm.

It was 2. 32 p.m when Minister Peiris, clad in a gray suit walked in carrying the People’s Alliance government’s fourth budget with a staggering deficit of 99.5 billion rupees. His valise was artistically tied with red and blue ribbons, the PA colours. There was thundering applause from the government while an apparently dispirited Opposition sans its leader Ranil Wickremesinghe and several heavy weights, preferred to remain silent.

Saying the economy was in good shape despite the war, the Minister urged that waste and unproductive expenditure be reduced as heavy financial control was necessary if the economy was to perform in a similar fashion over the next few years. He proposed to save a mammoth Rs. 2,440 million in this way.

Dr. Peiris at length, described the war situation and the resultant escalation in defence expenditure. But the goal of reducing the deficit has been achieved, and with committed efforts to effect stringent finance control, the deficit of 6.5 % of the GDP could be reduced to 4% by next year.

Like all politicians do, he did not miss the opportunity to have a small dig at the former regime as he illustrated the background in which the PA assumed office. He said there was a hostile political environment, ethnic disarray, weak macro economic fundamentals added to social unrest. “In this backdrop, the PA’s singular priority was to re-establish sound economic policies while fostering ethnic unity and democracy.”

The Minster called upon the people to join in a spirit of goodwill and co-operate to resolve the ethnic crisis, the biggest deterrent to a developing economy. Nation building was the prime task, a task still continuing despite some factions sabotaging the efforts. While the Opposition gleefully smiled and made unparliamentary noises, the Minister batted on speaking extensively about the war expenses, and the benefits he sought to announce.

An irate member asked whether this was a speech on the military strategy or budget speech.

“The LTTE has repeatedly tried to devastate the economy by attacking strategic places like the Central Bank, Kolonnawa oil tanks and the Galadari. This is not a war of our making or our choosing. We have initiated a dialogue about the ethnic question and stuck our necks out to resolve it. We intend offering the peaceful path to those who live in anguish and pain.

“Despite the attacks, we have settled people in the North and the East successfully. Similarly, the economy will also bounce back. It is in a spirit of compassion and understanding , a sacred social contract we seek to fulfill,” he said.

Scoffing at the negative predictions about a crumbling economy, Dr. Peiris waxed eloquent. Despite setbacks, the deficit has been reduced, and many benefits were made for the general public. Teachers, pensioners and the public service benefited during the last three years, and for those earning less than Rs. 7,500, the recommended 60% of the proposed pay hike will be implemented in January, and for the rest in July.

The government members maintained stoic silence when the Minister also announced that the proposed salary increase for Ministers and MPs had been stalled till July next year.

The din continued as the Minister explained the unfortunate fate of the economy despite having had the advantage of liberalizing the economy before several other nations. At this point, several ministers were apparently catching up on their sleep, while others were seen having their little private chats — something not unusual during a budget speech.

In the meantime the noise in the house was beyond reasonable limits. An obviously annoyed Speaker ordered the members who found it difficult to stomach the budget proposals to leave the chamber.

As Minister Peiris continued to paint a rosy picture of robust economy in the making, several UNP members were busy making catty remarks. The sessions were suspended at 4.30 pm for tea and the house resumed at 5 pm for the continuation of the speech.

The most significant late-comer was Opposition Leader Ranil Wickremesinghe.

The Minister also announced several incentives to agro industries, textiles and the gems and jewellery industry. Many concessions were also announced for small-scale entrepreneurs and agriculturists.

“Mr. Speaker, this was a country once renowned as the Granary of the East. So we must make things easy for them,” the Minster quipped. The most unusual was the decision to continue the excise duty at the prevalent rates.

As several UNP members rose to ask why not, the Speaker promptly quipped that the Minister would not change the proposals just because some irate members did not like them.

What the Opposition termed a budget with a ‘package thrust,’ the government members called a sunshine budget after a long time, as deserved by the people.

Empty words, says UNP MP

The middle class and the working class - ac knowledged as the backbone of any sustainable economic development - has got little besides empty words from the PA’s Budget, the opposition UNP has charged.

KodituwakkuDr Kodituwakku: brushes off budget as 'vain effort'

An angry Karunasena Kodituwakku, media spokesman for the party and member of its economic committee said in an interview that all the incentives offered for investment would be of little value until a political climate of confidence was created.


Q: What is your overall impression of the PA Budget?

A: It is a vain effort to mislead the people without recognising or showing any sensitiveness to the suffering of the people. Be it the cost of living, an inadequate income or the lack or creative income generating employment, none of these has been addressed in the Budget.

Q: Where will the Budget take this country?

A: I can categorically say this budget will not take this country anywhere but only into further economic chaos.

Q: Why?

A: There will be a greater growth of poverty, malnutrition and unrest among both the lower and middle classes.

Take the working class to begin with. This Budget has further increased the burden of living by increasing Business Turnover Taxes.

By April, this will be replaced by the GST. This would bring an immediate increase in prices of consumer goods.

The Government says this increase will not be passed down to the consumer, this is nonsense and gross stupidity to say so.

Q: How will it affect the middle class?

A: In any country productivity, creativity and innovation have to come mainly from the middle class which under this budget is worst hit.

The middle class is now not in a position to maintain the improved lifestyle they enjoyed upto 1994. Living standards have not even been maintained, leave alone improved.

The irony is that the bulk or the middle class voted for the P.A., hoping they will be able to have a better life. This Budget has shattered their hopes.

Q: What about the business community?

A: All four Budgets of this Government gave a number of concessions to the business community. But it is clear that upto now neither local nor foreign investors have responded appreciably. The Government has not realised that incentives are not enough by themselves. The political climate must be right and investors must have confidence in the government.

In this Budget the Govt. has uttered meaningless and useless words, as it has done in matters political.

This Budget will most certainly succeed in increasing the anger of both the middle class and the working classes.

The fact that the President and her Ministers go round the world with the largest possible entourage in tow using Air buses won’t help.

This budget has adroitly taken the people backwards to a bullock cart economy.

I must also say the Government is not seriously considering the financial implications of sustaining the ethnic war. The government has made little effort to strike a balance, e.g., in the last three years it has more than doubled the expenditure of the war. In 1993 it was 20 billion and in 1997 44 billion. Of course more supplementary estimates will come later.

The government claims it has liberated Jaffna to justify all this - this is nonsense.

Many disinterested, others indifferent

Not surprisingly cricket took prominence over Wednesday’s budget presentation in Parliament as World champs Sri Lanka were smashing Pakistan in Lahore. Many watched or listened to live commentaries of the match instead of the budget.

The following day it was again evident that the interest was more on the match than on the budget. As The Sunday Times tried to ascertain views of a cross section of people there were many who said “sorry we did not follow the budget as the match was more interesting.”

However here are the comments made by a few about the budget.

C P Jayasuriya (52) sales executive in a private establishment, said although he wasn’t able to concentrate much on the budget speech due to the cricket match his initial reading was that the ordinary people would not get much benefit out of what Minister G.L. Peiris called a people’s budget.

He said that proposals would have no immediate benefit for him financially or otherwise but there maybe more burdens in the form of price hikes, sometime next year through GST.

Mr. Jayasuriya said that he expected proposals which would benefit the middle class and the poor, but he was disappointed.

R.A.P. Ranasinghe a translator at the Customs Department from Ganemulla said it was generally a good budget but he was disappointed that the sixty per cent pay increase for many public servants was put off from January to July next year.

He said the overall economic aims of the budget could be achieved only if there was proper implementation and monitoring. He said employment generation could not be left only to the private sector the government also must fulfil its responsibilities.

He also said he would have liked to see more incentives and duty free facilities granted for farmers to buy their farming equipment.

Priyantha de Silva (32) a garment purchasing officer from Seeduwa said previous budget proposals had not been properly implemented and he feared the latest one would go the same way.

He had expected more tax incentives for the garment industry to boost investment.

Ajith Bulathsinghala (30) an executive at a computer firm from Maharagama said the budget appeared to be good for businessmen but not for the middle class.

He said prices of some essential goods could have been reduced while increasing the prices of liquor and cigarettes.

Gerald Wanigaratne (32) a bank officer from kalubowila said private sector employees like him had little or no relief from the budget. He and hoped that the payee tax would be withdrawn.

Who delayed the budget preamble?

For the first time, the preamble of last Wednesday’s Budget was not made available to the media until 5 p.m.

Normally the practice is that no sooner the Finance Minister begins his speech on Budget day, the media get a copy of the preamble. This gives the journalists an opportunity to carefully analyse the proposed economic thrust in addition to getting the ‘stated economy’ into the first editions of the next day’s newspapers.

Last Wednesday Finance Ministry Information Officer P. Manawasinghe said someone had put a stop to the practice of giving the preamble early to the media. Journalists were naturally angry. Unlike other Budget days this time the public gallery was clos \æed and empty. Another lapse was that though a large number of journalists were expected to be in Parliament to cover the event, there was only one lady at the reception desk to handle the whole lot. She was assisted very much later by another receptionist.

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