Business Times

Misusing the people’s money

This week’s protests over the Pension Bill and subsequent killing of a young FTZ worker in police shooting, one hopes, will serve as a warning to the Government not to steamroll any proposal that has wider public ramifications without a proper debate.

President Mahinda Rajapaksa, ironically, was one of the biggest flag bearers of human rights, founding the Mothers’ Front and canvassing human rights issues in Geneva due the repression of the 1989-90s’ when many innocent young persons were killed in a bloody crackdown.

Has he forgotten the past or is he being misinformed or ill-advised on the controversial Bill and various other issues? Last week the President is reported to have furiously confronted some senior government officials and blasted them for not consulting him before drafting the Bill.

The Government has been forced to withdraw the Bill and blundered in the many statements and decisions taken in ‘damage control’ measures. For example, on whose authority did the Information Department issue a statement saying the Sri Lanka Freedom Party (a political party) Central Committee had decided to ‘suspend the Pension Bill’? On government website, it was stated that: “ The Central Committee of Sri Lanka's ruling coalition main party, the Sri Lanka Freedom Party yesterday decided to temporarily suspend the proposed private sector pension scheme. The party arrived at this unanimous decision at its Central Committee meeting held under the patronage of President Mahinda Rajapaksa at Temple Trees last evening.”

In the first place, how can a government information unit issue a statement on behalf of a political party? Will they give that ‘privilege’ to other parties too? Secondly, how can a political party (ruling or otherwise) decide to suspend a government plan when Rajapaksa was in the chair as head of the Central Committee, not REPEAT not the head of the government, head of state or as the President?

This is the kind of stupid advice that the President and the government is getting from who-knows-who. Another example of the blundering is in rushing to exempt FTZ workers and garment workers outside the zones from the pension scheme in an effort to get them on their side. By doing so, workers in other sectors also can rightly ask for an exemption and cannot be denied this right. One report said a deputy minister, at the scene of the protests at Katunayake, had called the President who had told him to advise workers that they would be exempt and call off the protest.

Can decisions be made like this, on-the-spot and without a proper assessment? For the past week the government has gone on damage control mode, agreeing to everything and anything like pensions for life, voluntary, etc until the announcement to withdraw the scheme. There are also pro-government supporters coming up with various arguments saying opponents of the scheme have not studied it properly and are opposing it based on misconceptions. One such argument: “Even public servants have to serve a minimun of 10 years to get a pension, so why not the private sector?”

Well in the first place, government workers don’t contribute a dime for their pensions, so the argument is an idiotic one.

It was the Business Times (BT) that first focussed on this crisis in the April 10, 2011 edition in a news story headlined “Government sneaks bill into parliament” and an editorial urging the Government to present a White Paper and call for public discussion. This came as the National Labour Advisory Council (NLAC), which is the tripartite consultative body on labour legislation, was totally in the dark about the proposal despite asking for its contents. Labour Minister Gamini Lokuge and its officials were very uncomfortable in responding to queries from NLAC members saying it was the Finance Ministry that was drafting the Bill and giving the impression that they didn’t know much about its contents (and the way it was being drafted).

The BT followed up with other reports and in one editorial (on May 1) said the pension scheme for migrant workers was an even, more problematic plan. While trade unions were opposing the pension plan for private sector workers, no one was speaking on behalf of migrant workers as it was an unorganised sector. UNP MP Eran Wickramaratne, in an article on this page, suggests that the pension plan for migrant workers should also be scrapped.

Work at the FTZ was crippled due to the closure of the zone for a few days and gave a wrong signal to foreign investors particularly at a time when the Government wanted to substantially increase Foreign Direct Investment in the post-war era.

No doubt a pension scheme for the private sector is a long-felt need. Workers have been clamouring for a pension for many years and in the past shot down proposals to transform the EPF into a pension scheme. However the present proposal was badly managed by the government and smacks of an attempt by a cash-strapped Government to use the funds for runaway spending.

In another controversial move, reported on the previous page, the Inland Revenue Department has ordered all private provident funds to invest 40% of its funds in state banks and treasury bills. This will also boomerang on the Government as the members have a right to invest where ever they like and these funds have been well managed in the past without a fuss. This is being perceived as yet another avenue for the Government to raise funds. When will they (the authorities) ever learn?

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