By  I.P.C. Mendis Courtesy: Island

November 20, 2016, 8:30 pm

“The mountain laboured and brought forth a mouse ” goes the famous saying. Finance Minister Ravi Karunayakes’s pre-budget inspiratory  assurance of a budget that would jolt the people with “Holman” (Ghosts), proved to be a damp squib and much before the people realised it, some Members of Parliament were seen non-plussed, yawning, otherwise pre-occupied or simply dozing ! Such an incoherent budget, the country had not seen. Much of it would have been relevant for a Throne Speech and not a Budget Speech which is normally expected to detail the state of the economy and how best it is proposed to tackle problems, how to bridge the deficit between revenue and expenditure and what the future holds. Gone are the days when Budget Speeches were excellent material for students. The rot set in when President Premadasa found no use of such time-consuming thesis and wanted the speech restricted to 45 minutes. The debate itself was fixed for the following day leaving practically no time for front-liners in the Opposition to study. Minister Karunanayake seems to have realised the importance of the budget speech as of old but failed miserably in its art and substance. The Finance Minister needs to realise that in a situation where some 31 of his proposals in Budget Speech 2016 have not seen the light of day, he must necessarily be circumspect in his euphoria for 2017. He appears very thick-skinned to risk another set, most of which have the potential of suffering the same fate. A Finance Minister who had assured senior citizens last year that an additional Rs.500,000 would be available for investment at 15% interest (in addition to the one million already authorised)  must be very bold  to repeat it without so much as an apology. A Minister who had already taxed Ceylon Tobacco at 90% and crowed about it  must be shameless to make a “request” of the company to fork out Rs. 500 mn.  to the President’s Fund in the bid to fight cancer. Quite apart from the ethics of it and the cynicism to get the company to virtually fasttrack its own demise what prospective investors both local and foreign will make of it is another matter.

Nor does it appear that sufficient attention has been paid to making it prohibitive for illicit hooch manufacture and the possibility of it being controlled through heavy taxes on some raw material used in its manufacture. Make no mistake – the “request” to CTC is not an innocent one. The CTC is faced with a “Hobson’s Choice”. It looks more in retaliation for what is said to have happened in the past which  has now been made common knowledge through TV coverage. This comes from a government which pledged to eradicate inter alia, thuggery, intimidation and corruption. The Finance Minister (by implication the government)  has in desperation done a Marie Antoinette by proposing to replace three-wheelers with electric cars gradually! As a first step the import duty has been increased. An encouragement for organized transport of another hue to benefit people with capital, edging out the poor man.

The Icing on the Cake

The icing on the cake comes from the Finance Minister himself in blaming the media

for allegedly mis-interpreting the proposal to impose a minimum fine of Rs.2500/- for traffic offences. The day before he issued a statement refusing to retract. Never did he mention then about a mis-interpretation. Gemunu Wijeratne the private bus boss when asked by the media what the correct interpretation was, sarcastically replied that the question needs to be answered by the Minister. The Minister’s recourse to the Cabinet on this issue, per se, is sufficient evidence that there was no such mis-interpretation.

Some comments on selected

proposals are as follows –

Para 144 – Paying wards in state hospitals to be run together with private sector. Also, private medical testing laboratories to be permitted in state hospitals. – Indeed, a step to legitimize the already prevalent practice of getting patients to patronize private laboratories. While specialist doctors are entitled to private practice only outside working hours, they will henceforth be quite happy utilizing duty time also using state facilities – the non-paying category being the poorer by their studied absence in wards. The malady is bound to spread among all doctors and will lead to unrest among other categories working in non-paying wards. It seems a first step to privatise para medical services.

Para 177 – Five-year multiple visas to be issued to foreign investors and their skilled expatriate labour. This comes ill from a government which heavily criticised the employment of skilled expatriate labour, particularly related to Chinese and Korean contracts. It forebodes an opening into the provisions of the ETCA Agreement proposed despite protestations to the contrary. It is also significant that the budget speech is strangely silent on the prospects of the ETCA Agreement which it is hell-bent on signing.

Paras 204 to 207 – Proposal to set up a Maritime Authority. Closing the stable door after the horse has bolted. Faced with great odds from international big business, including the all- powerful Conference Lines, the 1970 government of Mrs Sirimavo Bandaranaike succeeded in establishing two vital legal entities, namely, the Ceylon Shipping Corporation and the Ceylon Freight Bureau. The government did not fund the purchase of vessels and the CSC resorted to commercial loans guaranteed by government. The Freight Bureau ensured the equitable allocation of cargo and it was such a success that certain other countries interested themselves in the institutional framework – Came the 1977 government, and they were both deliberately run down. With all its good intentions the present government needs to get its priorities correct. National interests cannot be ensured with untrammeled “laissez faire” . The dockyard was part of the then Colombo Port Commission and the 1970 government carved it out from an Advance Account facility to a government/private sector (S.P. Tao of Singapore) company and this bold decision has made Colombo Dockyard to stand on its own and be proud of its achievements.

Para 245 – The Minister places emphasis on the importance of expressways and takes pride on reducing costs by 22%. He does not comment on the alleged reduction of lanes from six to four which will contribute to congestion in the future as already experienced during some seasons, even in the Southern and Katunayake expressways. He also does not compare the comparative costs between the already constructed ones and new tenders entered into by the present government.

Para 485 – Fee on filing a court case. This is most unjust and unfair. It erodes the freedom of the individual to seek justice. The citizen is not to blame for the inefficiency and mishandling by the State. The laws delays were consciously and deliberately enhanced by the actions of the UNP government of 1977 by, inter alia, restoring testamentary proceedings held by the Public Trustee back to District Courts and upsetting other arrangements introduced by the UF government of 1970 which benefited litigants and reduced delays. Delays are also due to most lawyers living on dates. It is up to government to strengthen the judicial set-up by revising some of the archaic legislation and procedures without squeezing the public dry.

The stoic silence on the effects on the economy on the stoppage of work on the Port City and some other important projects and the causes for exchange rate fluctuations is deafening !

(The author was a former Addl. Director (Budget) in the General Treasury and a former Deputy Director, Merchant Shipping in the Ministry of Ship[ping & Tourism)