Wednesday Nov 13, 2024
Wednesday Nov 13, 2024
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SJB MP Dr. Harsha de Silva
By Darshana Abayasingha
Main Opposition SJB MP Dr. Harsha de Silva yesterday charged that the Government is engaged in political games putting democracy at risk due to its selfish actions.
Dr. de Silva rebuked Government claims the country does not have money to hold local Government elections, and stated the SJB could show Government forecasts are grossly incorrect.
He added Parliament has control over state expenditure, and the House should take charge of funds and ensure democracy is maintained.
“If someone says there is no money, that is a lie. I don’t believe one person can determine what are priorities for this country. The President says priorities are salaries, pensions and interest on loans. Rs. 2.2 trillion has been assigned for interest payments, and Rs. 2 trillion is for domestic debt. If inflation is coming down, there is no need to keep rates so high.
“There is a 100% increase on rates of treasury bills at around 30%, as there is higher risk attached. But if the economy is improving as the President says, then that risk comes down alongside rates. You can easily save over Rs. 5 billion out of Rs. 2 trillion. That easily defeats the argument that the Government cannot find Rs. 5 billion. My forecast is based on the same assumptions made by the President,” De Silva stated.
The former chairman of the Parliamentary Committee on Public Finance also scoffed at Government claims it could earn Rs. 100 billion from Personal Income Tax and stated real earnings would be around Rs. 48 billion with the existing tax base. He added that despite some quarters claiming increasing the tax threshold to Rs. 200,000 at a maximum tax rate of Rs. 24% would suffice, this would only yield around Rs. 25 billion and cannot be done.
“Those earning up to Rs. 450,000 can be taxed at 25%, but those who earn high salaries must be ready to pay up to 40% over the short-term. That is the only way we can earn Rs. 48 billion. We cannot make Rs 68 billion, and if they cannot furnish the data to back their claims then this is all a great lie,” De Silva added.
The SJB MP expressed his disappointment over the President’s recent speech in parliament regarding local Government elections, and questioned why the UNP itself gave nominations and placed deposits if elections were not to be held. De Silva remarked he hopes the president would re-evaluate his own comments, adding that should the president violate the principles of democracy it would be rejected by the people.
Commenting on the claimed impact of elections on the timing of the proposed IMF agreement, De Silva said he doubts the IMF is concerned with local Government elections, as what they require is a stable central Government.
He also rejected claims by the Government that it had to raise electricity tariffs a second time as part of an IMF requirement. De Silva said he is confident the Government will reduce rates no sooner it announces an election. Once again, the forecast on costs for power generation is wrong, he said.
“If we assume Sri Lanka needs 15,000GW during a year, that estimate is done based on the cost of the generation mix. The last 2000GW will have to be done with the highest cost method like heavy oil. If we put 2000GW with oil as surplus, the Government says we need to charge a certain amount from consumers. But we can show that Sri Lanka does not need 15,000GW hours.
“After the initial price increase consumption came down. The assumptions for the second price increase are wrong. The Government agreed with the IMF without a discussion based on facts. The letter submitted by Patali Champika Ranawaka is correct, and the IMF must consider that.”
De Silva added IMF support is essential as it would open doors for further funding and enhance stability. He reiterated the SJB will continue with an IMF program, if in power, but would simply renegotiate some clauses of the agreement.
“The IMF agreements must be discussed in parliament, but it has not been taken up in the house. The President says he will bring the final document to parliament and to take it or leave it. We didn’t think the president would become dictatorial like that. This is not his personal matter; it concerns our country so we should discuss it. We are not here to be told it is ‘my way or the highway’. There has to be consensus and give and take.”
Following conclusion of the G20 sessions in Bangalore, De Silva pointed out the IMF chief has pointed out the global community must come into agreement on how it will tackle debt of bankrupt countries such as Sri Lanka and Surinam, which are not listed as low-income countries. The global community must enter into a new program to handle such nations, the IMF chief had said, and De Silva wondered when such a program could be drawn up and implemented.
He added that Sri Lanka could technically still receive IMF support through the Lending into Official Arrears Policy with support from the US, if 50% of debtors have agreed to restructure their facilities. If the loans from China Development Bank can be moved under commercial loans instead of bilateral loans, this could technically be achieved, De Silva said.
