President claims reducing defence expenditure easier said than done

Monday, 21 November 2022 01:14 - - {{hitsCtrl.values.hits}}

President Ranil Wickremesinghe on Friday claimed reducing defence expenditure, a growing demand by many, is easier said than done and warned doing so without adequate measures could cause chaos in the country.

Wickremesinghe was responding to a related question during the interactive post-Budget forum organised by the Daily FT and the Colombo University MBAA.

“I can reduce the (defence) allocation of Rs. 50 billion and reduce the armed forces at the same time. What will happen to the well-trained, unarmed people who will then be unemployed?,” the President.

“Without having an employable market, it is hard to implement. I cannot take Rs. 50 billion from defence without stabilising the country. The situation will be chaotic if those people come to the streets. It is easier said than done,” he said.

The 2023 Budget has allocated a colossal Rs. 539 billion (10% of Government expenditure) for both defence and public security ministries and the move has come under growing criticism since expenditure on health is only Rs. 322 billion and Rs. 232 billion for education.

The question raised to the President at the forum was that the proposed higher taxation on export income is estimated to raise Rs. 50 billion in revenue to the Government. Instead of taxing exports, as an alternative why cannot the Government reduce the Rs. 500 billion defence expenditure by Rs. 50 billion?

In response to a poser that the 2023 Budget hasn’t been explicit on rationalising Government expenditure, the President admitted that Government expenditure includes a fair amount of wasteful expenditure. “As much as we have raised taxes, we have to reduce expenditures,” he pointed out.

“As the Opposition has requested, we are trying to reach a ‘zero budgeting’ next year by reducing Government expenditure and allowing more money to be circulated among the private sector investments,” the President added.

See also Page 6-7