Financial Times

Point of View
Fiscal responsibility or highway robbery?
By A Wise Old Owl
The Minister of Finance announces the 2004 budget proposals, to the thundering applause of his colleagues and proudly holds due accountability to the nation having complied with the requirements of the Fiscal Responsibility Act - (he has since been recognized as the Sri Lankan of the year 2003 for demonstrating accountability under the Fiscal Responsibility Act). The minister also announces, amidst even louder applause from the ruling party colleagues, that a National Safety Net will be established to provide support for retrenched workers during the period of re-training, titled laudably as "Unemployment Benefit Insurance Scheme".

A chamber leader hails the achievements of the government, the minister and the treasury bosses on meeting the stiff target hurdles in the Fiscal Responsibility Act for a budget deficit. Another business leader praises the government on the dawn of a new era in employment laws, productivity and competitiveness with the introduction of Voluntary Retirement Schemes (VRS) supported by a safety net.

The scheme for the National Safety Net was later announced, with a fund established by an initial contribution from the government, with all employees and employers (every one contributing to the EPF) together paying a monthly amount of 0.5% of the salaries to support their unfortunate brothers and sisters, who may be laid off by the private enterprises in the cause of competitiveness and productivity.

In the same vein, tight rope walking, treasury bosses appropriated billions of rupees from the Employees Provident Fund's so called "dormant" accounts to cover the budget deficit, while giving a guarantee to repay if required to do so in the future upon a legitimate claim.

Citizen Perera and the working population of this nation are compelled to watch in silence as the political elite of the nation, dish out rhetoric and make decisions on behalf of the government and private sector, supported by several international consultants as well. Unfortunately, this scenario does not have committed and knowledgeable professional groups watching over the nations interests and governance accountability to the people.

If a "Wise Old Owl " is asked for an opinion, it casually blurts out just two words "highway robbery" and adds "possibly a continuing one with no regard for accountability."

The wise old owl argues, as to why on earth must all employers and all employees pay monthly contributions to support 6 months of re-training of those who are laid off. Why should n’t this be a charge only on the respective employers laying these employees off (i.e. extend the VRS payment by 6 months and let the employers deposit this amount in a bank to pay the monthly salary of the employees during the first 6 months following retrenchment? We must recognize that some employers may never lay off and some employees may never benefit from their contributions. Why, in heavens name didn’t the government accept that this is a matter to be left in the hands of those directly affected and the direct beneficiaries? If the fund is endowed with the responsibility of providing re-training facilitation, do we not have enough private enterprises and even the Skills Development Fund to be the provider of these services? This is robbing Peter, Paul, John and everybody around, to pay Peter for the direct benefit of Paul!

The real "Highway Robbery" is in appropriating billions of rupees to fund the budget deficit, from the so called "dormant accounts" of the EPF (by the way not yet defined publicly for accountability).

These balances to be appropriated comprise dues to named account holders, who have either emigrated, temporarily working abroad, females who have left employment but not yet 55 years old, persons who have switched employment but yet in employment with multiple accounts, unclaimed on account of death, incapacitation and ignorance and accounts opened in error.

In the declared framework of commitment to accountability hailed by the chamber leaders, can the government and treasury bosses be allowed to appropriate legitimate savings of the people of this nation to fund the budget deficits? Does the EPF Act empower this appropriation? As it does not, Mr. Minister are you going before Parliament in the name of accountability for your so committed colleagues to endorse an amendment? How soon will you reimburse within the snail pace government payment processes, when claims made in the future? Will your government set up yet another authority with selected cronies to invest and manage this fund and invest same under government directions? Will you next, similarly target the "dormant accounts" of ETF, NSB and government Banks to balance the budget within the commitment to Fiscal Responsibility Act!

Ego centric uncaring political leaders and arrogant treasury bosses must be held accountable for even proposing these measures in the name of fiscal responsibility and chamber leaders need to look in the mirror as to where their value commitments and national/social consciousness has vanished to! It is time for the intellectual elite who posses a social conscience to support grass root level movements that uphold people's sovereign right for accountable governance.

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