The people and the budget

The budget is our subject for the second successive day even though we pointed out yesterday that the midnight gazette invented by the late Dr. N.M. Perera has taken away much of the significance of the budget speech. We make these comments a few hours before Deputy Minister of Finance Prof. G.L. Peiris ( de facto Finance Minister?) commences his budget speech and thus we are confining ourselves on what the people would expect from the budget rather than speculate on what Prof. Peiris has in his brown box.

Prof. Peiris was quoted yesterday in a pre-budget interview saying that the country had the advantage of 'a sound macro economic' situation. What this means in simple terms is that the economy is on a solid foundation. We may be pardoned for assuming that if the economy is now on a solid foundation, it should be ready to take off. We sincerely hope it does happen but it has to be pointed out that previous finance ministers too had believed that the economy was on a solid foundation and the economy did indeed take off but crashed a few years later. We refer to the Sri Lankan economy after shifting from a stagnant mixed specialist economy to a free market economy having taken off and the economic growth reaching eight percent and thereafter slumping with the outbreak of two insurrections one in the North and East and the other being the JVP insurrection.

Whatever the projections based on the rosy hued statistics of the Central Bank are, the budget also serves the purpose of an honest appraisal of the state of the economy. It is an opportunity to take the people into confidence and this is essential if the people are to have confidence in the government. The erudite Professor Peiris's honesty and integrity has never been in doubt but his pedantic style of delivery spliced with economic jargon such as 'macro economics, micro economics, engines of growth, gross domestic product etc. often leaves the man on the street confounded.The budget would be judged by the large majority of the people on whether their living conditions will improve, prices of essential commodities will be within his reach etc. This is not peculiar to Sri Lanka but even to the only superpower whose mid term election results indicate that what mattered was the state of the economy and not the president's sexual dalliances in the Oval Office.

The watchdogs in the media, particularly the press, will be trying to logically analyse what the professor is saying despite the baying in the Kept Press. Yesterday, we had a once respected daily newspaper devoting an entire editorial-on budget day-in a vain attempt to ridicule 'The Island'. The cause of this ire was that we pointed out that the 'Then and Now' political rhetoriccomparing performances of past governments with the performance of governments in power as stated by their leaders- was the bane of the country. The presidential pledge at Polonnaruwa last week not to extend the period of government beyond the stipulated limit specified by law, we pointed out, was the reiteration of the pledge she made during the election campaign and that there was no reason for all this song and dance on reiteration of pledges. But logic is not the forte of the Geoffs and Mutts of the Kept Press and we had an editorial demonstration of lapdog loyalty.

Rhetoric is a poor substitute for pangs of hunger and the hard pressed middle class and the poor who comprise the vast majority of the country will judge the budget on how far their sufferings will be alleviated. For long they have suffered till successive finance ministers got their macro economics right and the political generals won the so-called war.

It is even more galling that a certain section of the population ,the super rich, seems to be getting richer and the 'trickle down effect' of the economics is not working. Perhaps some austerity measures such as taxing the super rich , imposing higher taxes on luxury vehicles and not exempting them for racketeers under BOI privileges and most important cuts on salaries and perks of politicians may convince the people that an attempt is being made to see that justice is done. The government may be genuine in its motives of granting concessions to the business sector and even politicians in order to get the economy moving but there is widespread abuse of such concessions as is seen in the transfer of duty free vehicles

Putting the economy on a firm footing is the right thing and the only thing to do. Sound economics is good politics but there is also the politics of hunger.