Harsha applauds RW on reforms but calls for early polls, questions political direction

SJB MP Dr. Harsha De Silva 

• Says elections could help President form team he desires to drive reforms
• Likens prevailing T-bill rates to a ponzi scheme
• Insists Govt. must consider increased poverty and adjust spending to suit revenue

SJB MP Dr. Harsha De Silva yesterday called on the President Ranil Wickremesinghe to exercise powers vested in him under the 21st amendment and call for a general election come March 2023, and form the team to steer this country forward. 

Addressing President Ranil Wickremesinghe who was in parliament yesterday, De Silva said the money is available with the Elections Commission and both local government polls and a general election could be held on the same day. 

“You are a student of American politics; you have told this to me for the last so many decades. Look at America, they held Senate and Congressional elections on the same day. Why can’t we do that here? The Elections Commissioner says they received 10 billion rupees for the local government elections. So, why cannot we have the general election on the same day? You can dissolve the parliament.

“We need a new parliament and a new government that has the peoples’ blessings. We have the economic vision and the team that you always spoke of. We can build a social market economy free of corruption,” De Silva exclaimed in the house. 

During the budget debate, the SJB MP and Chairman of the Public Committee on Finance criticized some of the tax policies mooted by Government and stated Government must control its expenditure to suit its revenue, rather than push draconian measures to fund fanciful expenditure.

 He warned of further deterioration of the economy and brain drain if the current policy is persisted with. De Silva stressed on the immense problem posed by interest payments on domestic debt, which is over Rs. 2,000 billion. 

“For last week’s Treasury Bills the interest rate for three months was over 33%, when it was just 5% when the Government changed hands in 2019. This is a ponzi scheme! You cannot run a country paying 33% interest for three-month treasury bills. It cannot be sustained. We must focus urgent attention on this. But the President did not touch on domestic debt during his speech. Will it be restructured; how will we bring it down? This shows the trap the president has fallen into,” the MP said. 

De Silva also noted the tax on gambling has not been increased and remains at 40%. He made light of Income tax payments by Casinos and called on the State Minister of Finance to look into how much they have paid. Notwithstanding the increase in licensing fees to Rs. 500 million, De Silva recommended there should be at least 30% Gross Gaming Revenue on casinos as seen in some other markets. He also questioned why some companies had been given 17-year long tax breaks and questioned what benefits they give to the economy.

Responding to Dr. De Silva, President Ranil Wickremesinghe quipped: “Yesterday, he told me it was a good UNP Budget,” much to the amusement of members. 

De Silva explained his position on revisiting the proposed taxes: “I said it has good reform. What I’m criticizing now is the other side of the coin; about social protection and social justice. You spoke about a social market economy, in a socio-market economy there is political liberalism and economic liberalism. You did well on economic liberalism sir, and I applaud you. All the reforms are good. But what about political liberalism? What about political freedom? What about justice? What about social equity?

“Consider the realities on the ground, how many people are poor? When President Gotabaya Rajapaksa took office poverty was 11%. But poverty has increased three-fold now. We have to acknowledge that. I agree that reforms are necessary and government revenue must increase. But I also urge you to consider that a lot of people are in absolute poverty and cannot even afford to obtain the necessary nutrition.”

The SJB MP also said it was the short-sighted policies of many presiding members in the house that had thwarted the development of exports from Sri Lanka. He said Vietnam and Sri Lanka had both exported $ 3.5 billion in 1995, but exports from the East Asian economy had grown to $ 336 billion in 2021, whereas Sri Lanka only exported $ 12.5 billion. “How can these same people provide answers to these questions now?”

Pointing to the recent sugar scam, the MP said it was criminal that only Rs. 250 million could be recovered in a scheme that had cost the Government over Rs. 16 billion. This aptly demonstrates the need for revision of existing laws in the country, to improve tax administration and net tax evaders, he said. 

De Silva also said Withholding Tax on persons with large deposits should be increased to 10% from its current rate of 5%, and the returns would be adequate to provide relief to the middle class who are severely oppressed by the present income tax regime.