ISSN: 1391 - 0531
Sunday September 9, 2007
Vol. 42 - No 15
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Wijeya Pariganaka

New blows and burdens

Some compare it to a thief at night, some to a picket-pocket on a bus and others to a crocodile in the Nilwala river, but they all mean the same thing -- they refer to the Government, which this week stealthily and swiftly pounced on an unsuspecting public to relieve them of whatever money they have left through a string of new direct and indirect taxes.

Parliament was turned into a battlefield and no less a personage than the Speaker referred to "terrorism" inside the well of that august assembly.

That the Speaker seems to have made a hash of the procedural aspects of the proceedings, especially the voting, has left people in doubt as to whether these laws have, in fact, been approved. According to our Political Editor, the numbers game went in favour of the Government but every such victory won by heaping a heavier load on the long suffering people of this country must be a pyrrhic victory.

Supplementary estimates or 'mini budgets', as were introduced this week are an erosion of political accountability. The annual Budget, usually introduced at the end of one year for the next, is the centre-piece of a Government's economic policy and is debated fully in Parliament and voted on.

The practice of supplementary Budgets for substantive amounts and significant purposes could be traced back to Dr. N.M. Perera's days as Finance Minister. Later, these developed into the notorious "Budget by Gazette", when ordinary people woke up to find midnight Gazettes had raised prices of essential items, especially foodstuffs.

The problem with respect to these estimates is that they are often not discussed fully and not placed in perspective of total Budgetary expenditure. Besides, it allows the main Budget to not disclose the actual expenditure of the Government when it is presented and discussed. In recent years, defence has been the main area where such distortion in expenditure has substantially been made. "National Security" tends to give a licence to spending in an unaccountable manner.

Any economist will tell you that both large supplementary estimates and taxation by Gazette are a clear evasion of accountability of Parliament for finance and in the broader picture, an erosion of Parliamentary democracy.

Thus in many respects, the Budget process has become a theatrical and highly politicised exercise that has eroded the concept of public accountability of public resources.

It has been pointed out that inconsistency in fiscal policy has been a serious failing in Sri Lanka, where tax benefits are given in one Budget and withdrawn in the next. There must be a rationale for the imposition of taxes, and the paying public must be told what they are being taxed for.

In this week's case the public that has to foot the bill has not been adequately told what this extra money is being taken for, and one is left to guess that it is for increased spending in the war, Government mismanagement and inefficiency, jumbo Cabinets, and wasteful expenditure.

It is a public secret that people of all walks of life -- except the ruling class and their business cohorts -- are finding it increasingly difficult to meet their monthly bills.

Each passing week sees prices of some essential item going up while the Government trots out some lame excuse. When the price of gas shot up recently, the Government's unsympathetic response was that only 27 per cent of the population use gas.

In the face of all this, the public witness the VAT scandal, the MiG scandal, the COPE reports, the Auditor General's reports, and nobody being taken to task for these 'crimes against humanity'.

The people, asked to tighten and tighten their belts, will surely not grudge these taxes if only they know that each rupee extracted from them is well spent by a caring Government. Instead, what they see is wanton disregard for public expenditure. Parliamentarians and cricketers being given duty free car permits to flog to already wealthy people in such an environment, for instance, or huge presidential delegations on foreign junkets, are not a good example of leadership.

After World War II, Britain with a devastated economy, imposed meat rationing (only tourists were given these rations freely) and brought in foreign exchange restrictions. The people accepted these hardships because their leaders set an example of frugal and prudent living.

But in Sri Lanka today, politicians brazenly say "My Porsche; my problem". Public financed Budget airlines have started with an open cheque-book and licence to spend. Cabinet Ministers take wing on useless missions, while the struggling fisherman has to pay more for his diesel or kerosene and now, his mobile phone.

These are the things that hurt most, more than even the taxes that are coming thick and fast in recent months.

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Copyright 2007 Wijeya Newspapers Ltd.Colombo. Sri Lanka.