Budget Debate — 1st Day

Deputy Minister of Finance acted like a salesman trying to sell a ramshackle vehicle
- Hameed

Parliament met at 9.30 a.m. Tuesday, November 10, 1998, with Speaker K. B. Ratnayake in the Chair.

After Ministers answered oral questions House resumed the adjourned debate of the Budget for 1999.

A. C. S. Hameed. (UNP Kandy District) said: I must congratulate the Minister for introducing the 5th budget of the Government.

The Deputy Minister of Finance fluent both in English and Sinhala acted like a salesman trying to sell a ramshackle vehicle.

Since the Budget was introduced it was raining. Some of the important Ministers were absent when the budget was presented.

C. V. Gooneratne who was a vociferous minister was not present. I can understand why. Fifty one percent of his allocations has been reduced. The Textile Restructuring Board has been taken off from him and transferred to the Finance Ministry. He might have thought it better to be at home.

Minister Kingsley Wickramaratne who was in the past advocating taxless incomes was neither present. Foreign Affairs Minister Lakshman Kadirgamar too was absent.

He must have thought it a waste of time to sit beside the Deputy Minister of Finance for five hours.

It was the first time budget proposals have been taken off while the speech is being made. In the past such withdrawals took place only during the debate.

Many things have not gone up in price. Price of rice did not go up but packeted rice went up. Bread price did not go up but prices of sandwich have gone up. Liquor and cigarettes went up in price. Postage went up.

You gave lavishly to the rich. A rich man has a Rs. 2 million bonus when he buys a Volvo or other luxury car. But what does the poor man get? You have not given a reduction on the duties of the vans which transport school children.

This reminds me the shepherd who is eying the fat-sheep rather than the black sheep.

You have not passed the benefit of world oil price reduction to the consumer because you have employed 7000 additional hands in the Petroleum Corporation as the Central Banks’ report says.

The World Bank Report prepared before the Aid Group meeting that Sri Lanka’s poverty programme has dropped in value. According to this report during the period 1994 and 1997 you have reduced the expenditure on this area from 2.7 percent to 1.9 percent of the GDP.

This is the present situation in the country.

You are expecting the GDP to increase by 5 percent. Inflation rate is 8 percent. The total of these figures is 13 percent. So your claim to have increased expenditure on education by 14 percent is not true. The increase is negative.

You promise to create 250,000 jobs is unrealistical. I would say that this would remain at 150,000.

Six hundred thousand sat for the Ordinary Level exam. 150,000 sat for the Ad. Level examination. 11,500 are entering universities. Where are jobs for the graduates coming out of the university?

The World Bank says that you have been giving jobs on a discretionary basis. This means jobs have been given on political basis.

The postal Department had been interviewing hundreds of people for jobs. But what was the basis of such examination.

The Minister was responsible for the recommendations of the report of the Commission on youth Unrest. When we were in power we implemented the proposal to give jobs on the basis of merit.

You are boasting that this great country was not affected by the East Asian debacle. See what happened when we were trying to liberalise our economy.

During our time we liberalised the Current Account but never the Capital Account. You are now liberalising the Capital Account too.

You endorsed the Indian explosion of a nuclear bomb. But what happened after that? The stock market come down by 500 percent and it never recovered from that point.

Look at the investment. It was USD 187 million in 1993 USD 158 million in 1994, USD 15.6 million in 1995, USD 86.5 in 1996, USD 128.7 million in 1997 and USD, 145 million in 1998.

What have you done during your four years in office. Can you name one? During our time we built the Mahaweli. We developed the port. We created the free trade zones and opened vast job opportunities. What have you done?

You have been accusing us of bad financial management. What are you doing? During our time we had issued Treasury Bills to the value of Rs. 98 billion. You increased it to Rs. 125 billion. Then you retired Rs. 10 billion. The balance is Rs. 115 billion.

Then you brought out a monster — the Treasury Bond and raised Rs. 38 billion. Treasury Bond mature in one year or two years. By doing so you are postponing the bridging of the Budget deficit.Why are you harassing the poor workers of the Middle East? They work in the scorching sun. They come home in two or three years and bring a radio set, or a washing machine. You want to deprive them of it.

These are the people through their foreign exchange sent home that governments have been able to do away with queues.

Please don’t do this to the poor people. I am sorry about them because I created the market.

Minister Dharmasiri Senanayake: Government will withdraw that proposal though it may not be to your liking

A. C. S. Hameed: Only the blue chip companies have benefited from the reduction of interest rate. You are obsessed by the blue chip companies. What have you done to the small businessmen of the country?

According to the Central Bank, again the investors are following a wait and see stance until things turn out better at home.

You went before the international community with a devolution package and the international community backed you. But what did you do? You went on talking about terrorism. When the world knows that there is a terrible terrorist problem in this country will investors come here.

Your budget speech does not say a word about resolving the problem. You are accusing the Leader of the Opposition of being the propagandist of Prabhakaran. Is that the way to resolve the problem.

Are you going to carry on with the war? Or are you keep on solving it? Why then don’t you want to talk to Prabhakaran? Why don’t you show the proposal to LTTE? You can use the services of somebody to conduct talks with LTTE.

We have been listening to your speeches for four years. The premise you have choosen to build the economic edifice is wrong.

Minister of Buddhasasana, Cultural and Religious Affairs Lakshman Jayakody: We, as a government have a tendency to feel what the people want.

With regard to the defence levy, it started in 1992 with 1% by the UNP. This year it is 5.5%. It is a very big revenue for the war.

If there is an increase from 4.5% to 5.5% there is only an increase of 1.0%. With the amount of disruption that has gone on with regard to the war, with all the sacrifices made for the war, this increase is not so much because there must be a contribution as so many are sacrificing their lives.

In this budget I find very laudable and advanced thinking. There is a vision and an aim. The budget has adopted a market friendly policy. It has formulated a 6 year framework.

Safeguarding our national interest is vital. Private sector attracts capital. Without technology and management skills there will be no development.

There is a lot of infrastructure activities going on in the country. For instance roads, bridges, provincial roads, etc., have been spent upon.

The UNP did not care much for the macro-economic system. We did away with their policy of crony capitalist development policies, and high inflation.

Our biggest challenge now is to contain the budget deficit.

(Contd tomorrow)