Heed their voice
Friday 27th January, 2023
A group of Central Bank (CB) employees, on Wednesday, joined other professionals in protesting against the recently-introduced steep tax hikes. As part of the ongoing Black Protest Week campaign conducted by a collective of professional associations, those workers put up black flags and stood up to the police, who tried to disrupt their demonstration. Some police officers tend to go out of their way to ingratiate themselves with their political masters, and run the risk of being hauled up before court for fundamental rights violations. Some CB workers were seen protesting in Colombo yesterday as well.
The irony of the CB workers’ protests may not have been lost on political observers. The CB is spearheading the government’s efforts to secure a bailout package from the IMF, which has prescribed the huge tax increases at issue. But the CB employees themselves are opposed to that measure, and with reason! How could the government expect other workers to accept its tax policy?
Why professionals are so incensed as to take to the streets against tax increases is understandable. They are not refusing to pay taxes. Everybody agrees that taxes must be paid, for the state needs money to meet its expenditure, but they must be reasonable, and taxpayers need an assurance that their money will not end up in the pockets of politicians or will be used to support the high life of the rulers and their cronies, in some other way. Soaring inflation has taken its toll on their earnings, and needless to say, tax increases have aggravated their financial woes as never before. They have to look after their families and repay loans. What infuriates them more than anything else is perhaps the fact that politicians live in the lap of luxury at their expense and waste colossal amounts of public money, the allocation of more than Rs. 200 million for the Independence Day celebrations to be held early next month being a case in point.
Worse, all executive level employees in this country have had to contend with multiple taxation. Their salaries are taxed; they are affected by the taxes imposed on the Employees’ Provident Fund. When they retire, their terminal benefits are taxed. They have to pay taxes on their interest income as well. Thus, they live to pay taxes, and politicians are living off them.
Another factor that has exasperated professionals is the cavalier attitude of some government politicians who seem to think those who draw higher salaries deserve to be exploited. A Cabinet minister has drawn heavy flak from trade unions for saying something to the effect that anyone who earns Rs. 100,000 or more is ‘not innocent’. Is it that one loses one’s innocence when one begins to earn more than Rs 100,000 after studying hard, acquiring academic and professional qualifications and gaining experience? It is only natural that workers become resentful when they see semi-literate politicians living like Citizen Kane while they and their family members are suffering.
It will be a huge mistake for the government to ignore the voice of the professionals on the warpath and resort to coercion in a bid to neutralise their protests. They are different from the Aragalaya activists, who were dependent mostly on their numerical strength to win their demands.
The Aragalaya protest movement disintegrated owing to crackdowns, and the government has since embarked on a witch-hunt against its leaders. Notorious drug kingpin, Kanjipani Imran, secured bail and fled the country, but student leader Wasantha Mudalige, who was involved in Aragalaya, has been arrested and remanded under the Prevention of Terrorism Act! The government will not be able to deal with the protesting professionals in a similar manner, for they possess trade union power, which they will not hesitate to use if push comes to shove.
It behoves the government to stop playing with fire and get the representatives of the warring professionals around the table without provoking them further. The sooner, the better!
More heavy lifting to be done
As President Ranil Wickremesinghe tirelessly stressed, the signing off on the Extended Fund Facility (EFF) with the International Monetary Fund marks a new beginning. “Forget the past and the old games,” he has said seeking the cooperation of both the opposition and the media for a great leap forward. He has made the point that the IMF arrangement of USD 2.9 billion opens the doors for further credit adding up to USD 7 billion from elsewhere. When he met editors and other media heads on Thursday he said we have to continue negotiations with bilateral and multi-lateral lenders as well as private creditors which he admitted would be the most difficult.
The bad news when this was being written on Friday was that unless there is a dramatic change of heart on the part of the executive, the likelihood of the scheduled local government elections in the foreseeable future appears more than remote. There are, of course, a clutch of cases before the courts at present and which way the determinations will go is not clear right now; also in which direction the dice will roll once the courts rule. But it is patently clear that both the president and the government want these elections as much as they want a hole in the head.
There is no need to labour the reason why the incumbent establishment does not want local elections at the present moment. This, notwithstanding SLPP General Secretary Sagara Kariyawasam’s mealy-mouthed protestations that his party does not wish these elections put off. The electorate is very well aware that these elections cannot mean a change of government. Wickremesinghe is safely ensconced on his presidential throne until Gotabaya Rajapaksa’s term runs out in November 2024. Wickremesinghe is constitutionally empowered to dissolve parliament whenever he wishes from now until then. That’s the whip-hand he holds over his SLPP backers who made him president. It will safely ensure that they will not rock the boat during his tenure.
Just as much as the president and his government do not want any election in the short term, the opposition parties are literally panting that these be held soonest for reasons that are all too obvious. The last time the country elected local bodies was in February 2018 and the Rajapaksa party was the comfortable winner. The credit for this within the SLPP was widely apportioned to Basil Rajapaksa, its national organizer. That election victory heralded the coming of Gotabaya Rajapaksa in November 2019 and the Mahinda Rajapaksa government the following August. This is why the opposition, principally Sajith Premadasa’s SJB and the JVP-led National People’s Power (NPP), is striving might and main to have this election one way or another. The present signal is that they will not succeed in this endeavour. But as in cricket, there is no certainty in the outcome.
Though the president requested that the old games must not be played any longer, his supporters don’t practice what he preaches. There was a vulgar display of firecracker lighting, in true Sri Lankan style, greeting the announcement that the IMF deal was through. Everybody and his brother well know that this polluting lighting of strings of firecrackers greeting election results, politicians arriving at meetings and other similar events are funded by the politicians themselves. Some ghouls even lit crackers when President Premadasa was assassinated. We don’t know whether last week’s cracker lighting was a command performance or of old habits persisting. Whatever it was, it was unseemly.
The mere fact the IMF deal is through does not mean that the country is going to emerge from the economic morass in which it is mired. A great deal of heavy lifting remains to be done. The initial benefits cannot be more than a trickle. Possibly the June negotiations down the road may be an opportunity to offer some tax relief to professionals loudly protesting that the new rates are totally unrealistic. We run a letter from a retired Commissioner General of Inland Revenue in this issue who says that in his view, the problem is not with the rate of taxation which is between six and 36% but with the exemption threshold.
He rightly says that given today’s hyper-inflation. high cost of electricity, water and essential food, the Rs. 1.2 million exemption threshold is far too low. He believes that if this is raised to at least Rs. 1.8 million a year, it may be possible to win the unions over and reduce the tax burden on high income professionals. He has said this should not impact on the IMF agreements and the time has come for a compromise between the government and protesters. Clearly the now retired writer will not have access to actual numbers. But given his long service in the tax department, he would have an instinct for these matters.
It is also pertinent to say here that it is time the government makes a statement about the safety of the country’s banking sector. There are many worries on this score particularly after what happened recently in the U.S. and in Switzerland. It is well known that our state banks have been captive lenders to insolvent state-owned enterprises with such loans underwritten by the government. The fact that the IMF deal was successfully concluded, no doubt, is a reassuring factor about the stability of our commercial banking system. Nevertheless, a statement from the government will reassure constituents.
Political pole dancing
Saturday 25th March, 2023
There is no such thing as national interest in Sri Lankan politics, as is public knowledge. What looks like it is only self-interest in disguise. One often has politicians in this country saying they are promoting national interest, but what they are actually doing is pursuing self-interest. It is against this backdrop that former President Maithripala Sirisena’s claim that his love for the country has driven him to call for a national government to tackle the current economic crisis should be viewed.
Sirisena is full of praise for President Ranil Wickremesinghe and the government for having secured an IMF loan, and insists that there is nothing wrong with the conditions on which the extended fund facility has been made available! Sirisena was one of the bitterest critics of the incumbent dispensation, and there was bad blood between him and Wickremesinghe, but he is now backing them to the hilt. What has made him do an about-turn?
Sirisena has chosen to perform political pole dancing, as it were, to humour the government leaders since last January, when the Supreme Court (SC), which heard a fundamental rights violation petition against him and several others, ordered him to pay Rs. 100 million by way of compensation for his failure to prevent the Easter Sunday carnage in 2019. The SC order prompted those who are seeking justice for the victims of terrorist bombings to renew their demand that criminal proceedings be instituted against Sirisena, as recommended by the Special Presidential Commission of Inquiry, which probed the Easter Sunday terror strikes. Sirisena is now at the mercy of President Wickremesinghe, who alone can prevent the Attorney General’s Department from taking criminal action against anyone.
During the final stages of the Yahapalana government, Sirisena wronged Wickremesinghe, having secured the coveted presidency with the latter’s help in 2015. He stooped so low as to join forces with the Rajapaksas in a bid to sack the then Prime Minister Wickremesinghe although he had made a solemn pledge to throw them behind bars for what they had done during the Mahinda Rajapaksa government. In an unexpected turn of events, Wickremesinghe and the Rajapaksas are now savouring power together; Sirisena is seeking a political menage a trois in a bid to save his skin more than anything else.
Unfortunately for Sirisena, the Rajapaksa-Wickremesinghe government has no need for him. It knows that he is only trying to make a virtue of necessity, for most of the SLFP MPs (elected from the SLPP) numbering 14 have already crossed over! But Sirisena is not likely to abandon his efforts to make himself attractive to the government, given his desperation to avoid criminal action over the Easter Sunday bombings.
If Sirisena’s worst fear comes to pass, he will find himself in jail, and his political career will come to an end in such an eventuality. So, he is doing his darnedest to be in the good books of President Wickremesinghe and the government and will not hesitate to subjugate the policies of the SLFP to his self-interest.
Unions in govt.’s crosshairs
Friday 24th March, 2023
Hardly a day passes without a labour dispute reported from the state sector. There are signs of public opinion turning against the warring trade unions that resort to strikes at the drop of a hat. The government has sought to make the most of public ire to settle political scores with the trade unions that pose a threat to its interests.
President Ranil Wickremesinghe has taken a swipe at the education sector trade unions that are perennially on the warpath. Speaking at a public event, on Wednesday, he warned that if trade unions continued to ‘hold students to ransom’, the government would be compelled to declare the education sector an essential service. This could be considered a veiled threat.
The most effective way of keeping trade unions with political agendas at bay is to redress workers’ genuine grievances expeditiously. Instead, governments drive them to swell the ranks of trade unions with links to ultra-radical political outfits. So, the blame for chaos in the public sector due to frequent labour disputes should be apportioned to governments.
Workers must fight for their rights. If they don’t, who else will? But they must not ignore their responsibilities. Most of all, they must not test people’s patience. Sri Lanka’s trade union movement has a proud history. Its achievements are many. But it has gone the same way as all other institutions, over the years, owing to politicisation. More often than not, trade unions tend to overstep the line at the behest of their political masters.
The bane of Sri Lanka’s labour movement is that it is dominated by trade unions affiliated to political parties, which use workers as a cat’s paw to advance their hidden agendas at the expense of the public. There are some trade unions that are independent of political parties but they are the exception that proves the rule. They, too, act in an irresponsible manner at times with no consideration towards the public.
Everybody flays politicians for dereliction of duty—and rightly so. But trade unions are no better. It is doubtful whether labour leaders ever make a serious attempt to persuade their members to work hard and help enhance national productivity. The phenomenal growth of shadow education, or private tuition, as it is popularly known, is an indictment of the state sector teachers. Parents have to spend huge amounts of money for their children’s supplementary education. There are many exemplary teachers who are like candles, which burn so that others can get light, but overall there is much to be desired from the public school system.
All political parties including the UNP led by President Wickremesinghe himself have politicised and polluted the trade union movement so much so that politicians steal the limelight on the International Workers’ Day, when workers shamelessly offer their services to political leaders as palanquin bearers, as it were. Politicians craftily use workers to compass their ends when they happen to be in the political wilderness but after winning elections and being ensconced in power, they suppress trade unions. This is the name of the game in Sri Lankan politics.
Trade unions in this country are apparently playing the role traditionally assigned to the political Opposition, which is too meek to take on the government the way it should. Why trade unions are in the government’s crosshairs is not difficult to understand. The ongoing battle between government leaders and irresponsible trade unionists is, in our book, a case of sinners casting stones at one another.
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