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SJB MPs Dr. Harsha de Silva, Kabir Hashim and Eran Wickramaratne - Pix by Lasantha Kumara
Main Opposition Samagi Jana Balawegaya welcomed the mini-Budget saying it contained several progressive measures, but questioned rollout of reforms given reservations by Sri Lanka Podujana Party (SLPP).
“It is very progressive. We can’t hide behind the fact that we are in the Opposition and call it an absolute empty Budget,” SJB MP Dr. Harsha de Silva said at a post-Budget media briefing held yesterday.
Noting that the ideas were very positive, he said the matters that needs to be done has been mentioned as urgent measures, particularly on multitude of reforms.
“Essentially what we see is President Ranil Wickremesinghe attempting to change the course of the country’s economic path, by undertaking serious reforms to stabilise and restructure the economy. It is what we call a ‘modern productive enterprise’,” he said.
He said to achieve these goals President Wickremesinghe has introduced new laws to have a more disciplined or a system of governance.
“It was proposed to introduce a Public Finance Management Act, to run the affairs of the Government. Proposed amendments to the Monetary Law Act, which will de-pressure the Central Bank from Treasury and reduce money printing,” he pointed out.
Admitting President Wickremesinghe cannot achieve these immediately given the economic crisis, Dr. de Silva said these however were his objectives from the Budget.
With regards to the proposal to sell off 20% equity from the two State banks — People’s Bank and Bank of Ceylon to employees and depositors, Dr. de Silva insisted the process should be considered very carefully.
He also hailed the proposal to open up a tax file for everyone over the age of 18 years, noting it was progressive.
He said the question is how SLPP members who had been opposing these reforms for decades would support the proposals to go through. “They (SLPP) opposed every type and every time reforms were brought up for decades. It is a quirk of circumstances and fate almost — that it is them who will have to do these reforms now,” he said.
Though discussion on implementation of reforms were mentioned, he said they would have to wait and see for the reactions from the SLPP. “It is something like saying no to a girl all your life and suddenly you have to marry her,” Dr. de Silva quipped.
He said SJB does not disagree with the reforms. “We are not going to oppose reforms, that would be cheap politics. We have always been pro-reforms. We support decisions considering the next generation as it is our responsibility,” Dr. de Silva said.
In terms of the technical aspects, he said expenditure is expanding in a massive way compared to the minimal increase in revenue side. “This is not only due to the additional expenses in trying to deal with the difficulties faced by the low income people, but also because the interest rates have gone up by leaps and bounds,” he stressed.
He said at the time of the 2022 original presented by former Finance Minister Basil Rajapaksa, interest rate was at 8% and it had now increased to 30%.
“Though some of our debts were suspended to ISB and commercial debt owing to various foreign parties, the interest costs calculated in rupees have gone up significantly. This shows how significant depreciation has been on currency too,” he said.
Appreciating the effort taken to bring in a progressive mini-Budget within a short span, Dr. de Silva however claimed it was disappointing not see any increases in the direct taxes to expand Government revenue, rather the most taxes proposed are indirect and will adversely impact the low-income families.
“We don’t see any direct taxes being increased; only indirect taxes were increased. This is regressive and poor people are going to get hammered. We expected Ranil Wickremesinghe to walk the talk by taking the money from those dodging the taxes, including certain members who are going to be Ministers in his Cabinet,” he said.
Dr. de Silva claimed that despite what President Wickremesinghe bragged about the middle class and low-income being most affected for not imposing direct taxes, he also did not implement it. “We are disappointed with it. He should have done that,” he said.
Noting that the VAT has been increased significantly from 12% to 20%, Dr. de Silva warned that the people will feel the repercussions of it in another few weeks’ time.
“He (Wickremesinghe) didn’t mention that new Social Welfare Tax of 2.5% is actually around 5% VAT. Soon people are going to see repercussions of this as it gets implemented over the next two months. The middle class and the poor people will suffer,” he said, adding the selection of group to pat taxes should have been better selected.
SJB MP Kabir Hashim said as the main Opposition they would extend support any positive reforms, and if it is not implemented in a practical or transparent manner, they would also oppose it.
“We are ambiguous as to how these reforms will be implemented as it was not explained. We also would like to see how the SLPP will support these multiple reforms, which they opposed for years,” he said.
Hashim also said there were good points in the interim Budget, such as the extension of loan relief for businessmen, extending 20% of the Government land for young unemployed people for farming, and to ensure the Central Bank’s independence.
SJB MP Eran Wickremeratne said: “I see this budget as an empty budget in terms of money, not an empty budget in terms of ideas.” He claimed the mini-Budget included many proposals that the Yahapalana Government intended to implement during their tenure.
“In this Budget, many proposals are mentioned again after three years, such as reforms to the State-owned enterprises. It is seen as an event to turn all the wrong doings done by Rajapaksa’s to him (President),” he said.
He also said the it lacked mechanisms or proposals to curtail and hold people accountable for corruption.
