Financial Times

Unsung hero or villain of budget 2005
By Wise Old Owl
The elite and the business sector had budget blues in the weeks leading to D Day. The greens were having their share of fun, challenging the coalition to produce a budget that delivers on promises and is balanced.

The reds were playing their usual tricks by promising, demanding and threatening. The Carter, Harold and Pio trio who were left out of the budget process had their own blues. Citizen Perera watching all this had his blues as the cost of living noose tightened round his neck.

The Finance Minister was full of rhetoric and playing the usual photo tricks with the red box. The Treasury boss (ST) was quiet, except for throwing down a gauntlet to the IMF, World Bank and ADB and keeping them at arms length. It was anticipation, trepidation and caution that preceded the Budget announcement.

With a marathon speech the home grown, pro poor, pro-development budget is announced amidst a green with a big red bank balance jumping hurdles. The shocked audiences are joined by many actors on stage.

The play then begins to unfold. Attempting to take credit the Reds during the tea break shake the hands of the Chamber types, claiming that the package delivered was their own very special.

The Greens, green with envy get the ex 'tuition master par excellence' to do quick mathematics and show the salary increase net of extra working hours is only 6 percent. The private sector cries aloud that the budget lacks directions, clarity, confidence, consistency and care.

They do not believe the estimates and pick out a few figures that look almost sure to miss the mark. The professionals demand the details saying the devil is hidden there. The Big Bank staff and former big wigs of the budgeting process call foul, stating 'the estimates must be cooked up, after all anyone who knew anything about budgeting was sent out of the Treasury, so that the ' one man show' can have his way'.

The International types exercise caution, saying that the devil is in implementation. Citizen Perera is dumbfounded and remains confused. Whilst the budget is yet being announced, 'the prince of the Treasury', strides quietly in to the BMICH where the professionals are breaking new ground with a presentation on the same day ahead of its rivals.

At the BMICH and two days later in front of the accounting and auditing types, the ST sings a tune right from his heart. It is a song with a difference that appeals to all present. The addresses are aimed at the heart - the emotions, the mind - the intellect and the spirit-Values.

There was no detailed defense of individual estimates, but only a statement that only two figures matter going forward -the margin between the revenue and expenditure to GDP and holding flat the total debt to GDP ratio. True care for ordinary folk, a long-term hope with a difference, the need to listen to the voice of the majority and justifying the need of even to dare the mighty Cash Pots (the international banks) in the process were all in his song.

How he even dared make himself the proverbial sacrificial lamb to negotiate with the highest in the land to get the public sector taxed hit the target on the bull's eye. The development of the village and its farmers, small traders and SME's was the core purpose of the budget stated the ST citing that his own village had missed the trickle down of growth and had even lost him to add value to the city and western province.

He promises to defend the budget successfully in Washington but admits it is a challenge to deliver. The post mortem begins with the pundits challenging that the level of revenue, commercial borrowings, the deficit and investment targets are unattainable. Some critics say that the required figures to show a pretty smooth silhouette have been inserted in the medium term forecasts, the balancing figures have then been filled in. Some claim the new institutions and the new jobs created are not accounted for correctly and are not sustainable and are incapable of delivering the projected outturns.

Women given a maternity bonus could be discriminated in job selections. Is the piped piper disguised as Saradiel leading this nation close to a precipice in the medium term or delivering in the short term an election platform for the big boss? The private sector must however get on with its task of investments, growth and competitiveness initiatives, recognizing how bad it could have been or how a possible revolution near at hand has been averted. Let us trust the budget maker's sincerity of purpose and throw back the challenge and hold the ST accountable. Let time prove whether he was an unsung hero or a villain.

Clarification
Deva Rodrigo, Chairman of the Ceylon Chamber of Commerce writes:
I was glad to read the comments on the Olcott Oration delivered by me under the column titled Wise Old Owl. Since your newspaper has a readership that seriously studies news reports and other columns, you may want to publish the following clarification: "Ireland has a population of four million people as against Sri Lanka's almost 20 million. In comparing Sri Lanka and Ireland, Deva Rodrigo had stated that they are countries of similar size (not of similar population as reported in this column last week)."

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