Budget is a scam: Ranil

Saturday, 23 November 2013 08:51 - - {{hitsCtrl.values.hits}}

No real development since war ended: UNP
Debt trap is burgeoning, says Ranil
Lankans pay 41% of income in taxes: Ravi K
Dr. Amunugama says UNP criticism hasn’t helped Opposition win elections; stresses Budget 2014 focus is development, engagement, and equity

By Ashwin Hemmathagama Our Lobby Correspondent The Government’s Budget 2014 has impoverished 99% of the population, while contributing to the fattening of a measly 1% of the super rich, Opposition Leader Ranil Wickremesinghe told Parliament yesterday, as the debate opened on the UPFA’s ninth annual economic policy statement. The UPFA Budget proposals were nothing more than a heap of numbers and a stack of heavy documents that had failed to provide relief to a majority of the Sri Lankan people, the Opposition Leader said. “It’s a scam. It is a budget that effectively sends the people to the electric chair,” Wickremesinghe told the House yesterday. Sri Lanka under the current Government was transforming into a hub of casinos, drugs and illicit commissions, Wickremesinghe said. “It’s not a five hub policy that the Government is implementing, but a tri-power hub of casinos, drugs and corruption,” he charged. A real budget would provide a clear picture of the country’s economy and provide insight into which direction the country is headed in, he explained.

The Opposition Leader questioned what the Government had really been able to achieve since the end of the war, when Sri Lanka’s major expenditure ceased and opportunity was created to enhance its citizens’ living standards.“Has there being an increase in livelihood and improvement in standard of living? Have we reduced unemployment? Have we reduced debt? What are the economic enhancements farmers and the ordinary public have received? All that has happened is that the Government has taken the country headlong into a debt trap over the past four years,” he said. The Government was trapping the entire population in dangerous amounts of foreign debt claiming it was for development but in fact the money was going to line the pockets of individuals, the Opposition Leader said. “The United National Party only took foreign aid at very low rates on long term. But this government borrows on commercial rates. UNP was not greedy for debt. According to the Central Bank Rs. 80 billion worth Treasury bills and Rs. 317 billion worth of Treasury bonds are now held by foreigners. The Government boasts about sovereignty but this is like being in debt to Shylock,” Wickremesinghe said. He said 80% of the taxes imposed in this budget were indirect. “By Minister Tissa Vitarana’s own admission, 70% of the population is in the low income category, with an average income of Rs. 30,000 when the average household expenditure is Rs. 47,000 per month,” Wickremesinghe explained. Responding to Wickremesinghe’s statement, Minister of International Monetary Co-operation and Deputy Minister of Finance and Planning Dr. Sarath Amunugama asked the Opposition Leader the reasons for the UNP to get defeated on 25 occasions if development had been so wonderful under the UNP Government. “Development, engagement and equity was the Budget 2014 theme. It is a Budget prepared having consulted almost all sectors in the society. This is the reason the entire country has accepted it across the board. The GDP growth, inflation, exchange rate, current account balance, debt to GDP ratio, employment generation, budget deficit, the investment to GDP ratio are the parameters used to asses a budget,” the Deputy Finance Minister said. Amunugama said the Sri Lankan economy had grown 7.3% in 2013 and the Government was expecting it to remain at 7.5% in 2020. “Sri Lanka is on par with the global economic growth rates. This is not possible if agriculture, industry, and services sectors have failed. Tourism will be a key focus in addition to migrant workers. This is a part of the global remittances. “We have curtailed inflation at 6%, which is less than the countries in developing Asia. Poverty index is 6%. Unemployment is 5%. Fiscal deficit is reduced to 5.4%. We expect to have the fiscal deficit to 3%. We invest 30% of our GDP to meet these development targets. Unless we get foreign aids it is not possible to maintain a rapid growth in infrastructure,” added Dr. Amunugama. Joining the debate, UNP MP Ravi Karunanayake said Budget 2014 lacked vision and was essentially a plan to spend rather than earn money. “The Budget proposals are incomplete. They should have contained the fiscal policy and the monetary policy details, the balance of payment situation, the import substitution policy, the capital fund utilisation.” He said the Government was planning to reduce the budget deficit through foreign borrowings, which was a dangerous course. “Concessionary loans have reduced and the Government is going in for non-concessionary loans,” he said. Karunanayake said Sri Lankans pay 41% of their income as direct and indirect taxes. “If the money spent for CHOGM was used for public benefit, you could have reduced petrol by Rs. 50,” he charged.