Budget receives mixed reviews from politicians

By Daily FT News Desk

The Budget 2017 received mix reactions from parliamentarians yesterday, with ruling party members praising forward-looking policies focusing on exports and investments while the Opposition claimed the proposals lacked strategy and a coherent policy framework.

Former President and Kurunegala MP Mahinda Rajapaksa, sharing his comments on the Budget proposals, said that they have not given any relief to the public. “They have even taxed the cooperatives; there is nothing to really comment further. The public will feel the pinch when the Government actually implements the proposals,” he added.

He also claimed that Finance Minister Ravi Karunanayake is steering the economy without a direction. “The Finance Minister has hoodwinked the Government, presenting a good opportunity for the Joint Opposition,” former Finance Minister Rajapaksa said.

He stressed that he would vote against the Budget and if they fail to defeat it, the public would give reasonable answers to it.

Meanwhile main opposition party TNA, welcomed the reduction in prices in a number of essential commodities. 

“The positive element of this budget is that they have reduced the prices of some essential items, although by very little. This will bring some relief to the people,” TNA Parliamentarian M. A. Sumanthiran told Daily FT.  

However he criticised the proposal for short comings in coherence in policy strategy. “It lacked policy and strategy to back up the broad economic targets the Government has presented in the budget. There is no coherent policy and strategy that was presented in the budget to achieve the boarder aims they say they want to reach”.

Breaking down the Government’s plan for the next fiscal year, Sumanthiran highlighted that the Government has failed to improve investment and expand on development activities as promised. 

“The recurrent expenditure is still high, focus on the development activities is still low, with the revenue expected falling 20% short of the target,” he highlighted. 

Sumanthiran highlighted the shortcomings in the Government’s plan to broad base revenue collection where even proposals presented in the 2016 budget have been abandoned. Critical of the lack of focus on broad basing the revenue collection, he said this year’s budget does not put forward a proper policy outlining a strategy on the matter.   

“Last budget the Government said they will broad base the revenue collection and give the Divisional Secretariats the responsibility, but this did not happen during the period. This budget seems to have dropped the idea completely,” he said.

Pointing out another negative, the TNA parliamentarian claimed that there is not enough investment in job creation and developing the local economy. Speaking about the allocations for Northern development, he said the Government has failed to put forward any coherent plan to improve the livelihoods in the post-war recovery phase, apart from the project to construct 50,000 houses. 

“The only development initiative given for the north is that there is a 200% percent capital allowance for investments in the north. The budget has not presented any tangible proposals to address development needs, especially in the north. They have not looked at the specific needs of people of the post-war community in north.”

He highlighted that the Budget falls short of addressing the economic needs of the plantation community, despite the fact that their low economic status has been discussed widely during the year-long wage negotiations. 

JVP too were critical of the budget, saying that it has put additional burden on ordinary people.

“The budget has, as usual, imposed more taxes on public. The sectors Finance Minister Ravi Karunanayake failed to impose taxes in the previous budgets have been included in this new budget,” MP Dr. Nalinda Jayatissa claimed. 

Criticising the proposal for the Treasury to take over CESS funds, he said that the move exhibited the gravity of the financial crisis. The JVP was also severely critical of trimming of allocations for health and education. 

“It has curtailed the allocations for education to Rs.117 b. The Government is always speaking about free healthcare but he has suggested establishing paying wards and private laboratories within public hospitals,” Jayathissa highlighted, adding that the Government has failed to propose a coherent plan to overcome the existing financial crisis.

Compared to the budget presented last year, JVP echoed TNA’s opinion. 

“The Budget 2016 presented a better future economic vision, but this budget lacks even that. This is only a temporary measure. This is a coalition budget done by SLFP and UNP based on their economic policies, we will not vote for this, as it is not in line with our policies.” 

Joint Opposition MP Dinesh Gunawardena highlighted that the budget proposals impose extensive taxes on the working class. “It shows the Government’s lack of knowledge on the public requirement and the expectations. We see Budget 2017 as an unmanaged process,” he claimed.

Sri Lanka Freedom Party (SLFP) coalition Government members however, thought the Government has presented a comprehensive policy document to navigate the country’s economy in the coming year. 

SLFP spokesperson and Minister Dilan Perera hailed the budget as progressive and said that recommendations put forward by the party have been incorporated as well. 

 “It was a bit more progressive than last year. Finance Minister Ravi Karunanayake held several discussions with us to take recommendations from Sri Lanka Freedom Party (SLFP) to the budget. Some of the recommendations we made over education, agriculture, plantations, technology and fisheries have been accepted by him. We think this time Karunanayake will not need to make amendments to the budget,” said Perera.

Their recommendation to increase allocation for education has been accepted he claimed, adding that close to 95% of the SLFP proposals have successfully made it to the budget. 

“This budget has combined the economic policies of the SLFP and the United National Party (UNP). Therefore we expect to vote in favour of the budget. We can work with this budget as the proposals were drawn up after discussing with the SLFP membership as well,” he said. 

Members of the Government celebrated the budget claimed it laid the foundation to take the country forward.

“I am very happy about the proposals presented and congratulate the Finance Minister for an excellent budget. Unlike previous budgets, this time the private sector is invited to join hands with the Government to be partners of development. I don’t think that there will be issues in Budget 2017, which was prepared after a serious island-wide consultation process,” Deputy Foreign Minister Harsha De Silva said. 

Deputy Minister of Public Enterprise Development Eran Wickramaratne also found the budget to be a comprehensive policy covering all key segments. “Many consumer item prices were reduced. Rather than giving temporary reliefs from time to time, the Budget 2017 has a long-term vision,” he said.