MPs divided in Parliament over benefits of 2016 Budget

By Ashwin Hemmathagama – Our Lobby Correspondent

The Appropriation Bill 2016 – Second Reading Adjourned Debate was moved yesterday by opposition lawmaker Dr. Nalin Jayatissa who charged the Government of misleading voters by failing to deliver pledges made at the last general election.

According to Dr. Jayatissa, the Budget 2016 has “nothing solid” and the Finance Minister is following the same route his predecessor did, under a different regime. 

“Since independence, only leaders changed but not their ways of thinking. If Sri Lanka is a train, it got a new engine in 1977. Since then 39 Finance Ministers presented diverse budgets in this House. The Prime Minister confirmed to the House he will be continuing the third wave of changes his predecessors introduced – this Budget will be supported by those who were apart of the Rajapakse regime. Social market economy is your aim, your third and the last wave. This is nothing but a Budget that destroyed the dreams of the middle class,” he said.

In response, Minister of Transport and Civil Aviation Nimal Siripala de Silva praised the Finance Minister’s efforts for preparing a progressive Budget regardless of the hard times and limitations the Government now faces. “In 2012, the total tax revenue was Rs. 1,118 billion. In 2013 it was Rs. 1,204 billion and in 2014 it was Rs. 1,264 billion. In 2015 it has increased to Rs. 1,478 billion. 

According to projections this has to go up to Rs. 2,047 billion in 2016. So, this shows the Government was able to collect a tax threshold of Rs. 1,200 billion at all times. So, how would the Government generate funds required for development programs and continue to give reliefs for all things? This is the reality of the economy of Sri Lanka. We will not be able to go beyond this reality. Rs. 365 billion in 2012, Rs. 179 billion in 2013, Rs. 329 billion 2014 and Rs. 453 billion in 2015 were the foreign borrowings. In 2016 we are looking at Rs. 529 billion foreign borrowings. We need to take stock of the size of our economy, the limitations and the things we can do within it,” said Minister de Silva.

Joining the debate, Minister of Home Affairs Vajira Abeywardana said: “Many of the political parties in this Parliament were a part of previous Governments at one time. They had a chance to govern but have failed to take forward the country towards development. This is what the Prime Minister explained to you a few weeks before. With the changes in 1977 three free trade zones – Katunayake, Biyagama and Koggala were established. The last was the Koggala in 1991. But after 1994 none of the others were able to establish at least one free trade zone. So, a new thinking is required to create one million employment opportunities.”

However opposition lawmaker Wimal Weerawansa who was not in favour of the Budget proposals said, “You have successfully marketed the price reduction of 11 items including coriander during the 100-days. You have put a control price for plain tea and hoppers. But you have failed to meet the public expectation even from this budget. People expected you to add Rs. 10,000/- to the basic salary and also to salary eradicate anomalies. Instead you have started punishing your voters by enforcing Rs. 5,000/- for vehicle emission test and the permit fee of Rs. 20,000/- applicable each year. The fertiliser voucher is a step taken to curtail the subsidy. This is also the same with the school uniforms. Electricity and all other utility prices will go up.”

Outlining the international development and the adjustments required in Sri Lanka to head towards the correct direction, Minister of Megapolis and Western Development Champika Ranwaka said, “With the US economy getting strengthened we no longer receive fresh investments. The challenge we face is to retain the US investments in the country and to attract fresh investments. Even though we were against the US, 24% of our exports were aimed at US. We need to strengthen our rupee and widen our exports.”

Minister of Special Assignment Dr. Saratha Amunugama said, “Our taxes are not enough to meet 

the recurrent. So, we need to look at developing the capital expenditure, which is important. When preparing a budget prominence is given for the capital investment. Capital expenditure for this year is Rs. 868 billion, Rs. 517bn the year before. There is a considerable increase. The capital expenditure is the highest ever in 2016. Improving seed production is allocated Rs. 1,000 million, Rs. 2000 million for the rehabilitation of small irrigations and canals, 2,500 cluster villages allocated Rs. 21,000 million, Rs. 10,000 million is spent for new technology enhancement, rural housing development allocated Rs. 4500 million, megapolis Rs. 10,000 million, sanitary facilities of school Rs. 4000 million, and the list goes on and on. So, we need to take these also into consideration when debating a budget.”