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Editorial

Post-budget state of play

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The second reading of the Budget 2023 was comfortably passed last week with President Ranil Wickremesinghe strongly affirming that he will not permit another aragalaya and will not hesitate to use armed services muscle and, if needed, a State of Emergency to prevent it. Not surprisingly, it was thrown at his face that he would today not be President, and in that capacity, Head of State and Head of Government, but for the aragalaya. This is a fact of life that he cannot, and did not attempt to refute. But he did say that he did not ask for the job which, we are certain, is the truth, the whole truth and nothing but the truth. It was undoubtedly thrust upon him and he, unlike Opposition Leader Sajith Premadasa, did not first drop the catch and thereafter conditionally agree to accept the position of prime minister after Mahinda Rajapaksa was forced out of office. He accepted it presumably unconditionally.

Premadasa laid down the condition that a time frame for President Gotabaya Rajapaksa to relinquish office must be laid if he were to agree to be prime minister. And that too after Wickremesinghe, whose UNP was decimated to zero elected seats with him losing his own seat at the UNPs Colombo Central fortress. Nobody can quibble that RW holds an unconstitutional office. He was properly and constitutionally elected president by a comfortable majority to serve GR’s balance term after the former president fled the country and tendered his resignation from Singapore while Prime Minister Ranil Wickremesinghe was acting as president. RW was elected president by the Sri Lanka Podu Jana Peramuna (SLPP), a section of which party backed Dullas Alahapperuma as the common – barring the NPP/JVP – opposition candidate. Wickremesinghe was the Rajapaksa nominee for president earning for himself the sneering sobriquet of Ranil Rajapaksa. Thus he appears for all purposes the captive president of the SLPP.

As we have said before in this space, he will remain dependent on the pohottuwa until he is constitutionally enabled to dissolve parliament after February next year. But he formally went on record last week declaring that he will not dissolve parliament until the economy is stabilized. When that will happen is to all intents and purposes is anybody’s guess. Wickremesinghe, who our popular columnist Rajan Philips who returns to this page after a short absence today says was probably the first finance minister after Ronnie de Mel to write his own budget speech, did not even hint when the IMF bail out can be expected. Various straws are being floated in the wind but the earliest possible date seems to be March next year. Although the cost of living has hit unbearable heights with a sizable proportion of the population being compelled to forego one daily meal, the budget offered no tangible respite beyond repetition of long-held promises of social security cushions to the most vulnerable.

The last several days has seen the return to the country of former Finance Minister Basil Rajapaksa back from the U.S. whose citizenship he’s clinging on to unlike brother Gotabaya who gave it up to run for president. Basil was not long ago prevented, at the height of the aragalaya, from leaving the country but returned last week to a well publicized welcome at the VVIP lounge of the Bandaranaike International Airport. It has been widely perceived that BR pulls the strings that manipulate the SLPP. That view was enhanced by those who crowded the lounge to sycophantically receive him. They included the controversial presence of the chairman and a member of the National Police Commission (NPC). Former IGP Chandra Fernando who heads the NPC ineffectively pleaded his impartiality following the exposure of his airport presence with Basil’s cheer squad. Speaker Mahinda Yapa Abeywardene said a new NPC was being shortly appointed, implying that the rotten eggs in the existing body were soon being replaced.

With the Rajapaksas are returning to the national picture, the state-controlled Daily News on Friday front paged a photo of President Wickremesinghe with Mahinda and Shiranthi Rajapaksa at a DA Rajapaksa commemorative event in Colombo. There was a public celebration of MR’s 77th birthday both at the Abhayarama temple in Narahenpita, once the SLPP political headquarters, and at Tangalle where a jayapiritha reportedly attended by 1,000 monks had been organized. One uncontradicted report which we cannot confirm said that hefty contributions running from Rs. 50,000 to 100,000 each was collected from ministers, state ministers and corporation heads to fund this event. In a budget speech MR admitted making mistakes but did not specify what they were. Questions on whether these include the chemical fertilizer and pesticide bans, vanity projects bearing his name as well as Colombo’s Lotus Tower massively displaying the pohottuwa’s election symbol remain hanging in the air.

Perhaps President Wickremesinghe awaited the conclusion of the 2023 budget to expand his cabinet. There have been reports that he’s under pressure to do so and some observers have read ministerial ambitions among those who supported the budget. The voting figures clearly indicate the presence of Rajapaksa political muscle but whether this will presage, for instance, the return of Namal Rajapaksa to the cabinet only time will tell. The president’s focus would and obviously must be more on economic than political issues. While the critical situation that prevailed earlier this year with miles long petrol and gas queues are no longer present, the cost of living remains skyhigh. The budget offered no hope that this would change. Whether the ‘no dissolution before economic stability is restored’ declaration applies to any election whatever remains to be seen. That question will be answered by whether or not local authority elections will be held as scheduled by March 2023. That various machinations are afoot to delay these polls is very well known.



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Editorial

Return of state terror

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Monday 6th February, 2023

The spectre of state terrorism raising its ugly head again looms over the country. The Brownshirts of the incumbent regime, as it were, are now free to operate alongside the police to crush anti-government protests. Old habits are said to die hard. Those violent characters were seen in action on 03 February night at Maradana, where a group of people staged a peaceful protest against the government over the widespread waste of public funds, abuse of power, suppression of democratic dissent, economic mismanagement and the resultant hardships.

It was unfortunate that on the eve of the 75th anniversary of the country’s Independence, which was celebrated on a grand scale with public funds, the people were denied their right to protest.

The UNP has a history of unleashing state terror to silence its political opponents. In fact, it has got this down to a fine art. It did not spare even upright judges and human rights lawyers in its heyday. Its goons targeted independent journalists, and their violence left thousands of people dead in the late 1980s. They would swoop on polling centres, and stuff ballot boxes with the police looking the other way. Some senior police officers would stoop so low as to kowtow to the UNP thugs like Gonawala Sunil and Soththi Upali!

The Rajapaksa regimes also have had goon squads, which killed their political enemies, torched media institutions, and rigged elections with impunity. Their goons were free to crush Opposition protests in full view of the police. Friday night’s attack at Maradana reminded us of an incident that took place on the Independence Day in 2011, when the thugs working for the then Rajapaksa government attacked a protest march conducted by the UNP in Borella. Everybody knew that the goons were led by Mervyn of Kelaniya but no action was taken against him. The UNP condemned the Rajapaksa government for suppressing the Opposition’s right to protest. In April 2022, when the pro-SLPP goons attacked the peaceful Galle Face protesters, UNP leader Ranil Wickremesinghe himself issued a statement, not only condemning the savage attack but also calling upon the entire government to resign. But he joined the repressive regime as its Prime Minister shortly afterwards! Today, the Rajapaksas and Wickremesinghe are cocking a snook at the people.

The fact that political stability is a prerequisite for economic recovery cannot be overstated. But the government does not seem keen to pacify the resentful people. What provokes the public into holding street protests is the government politicians’ cavalier attitude, cronyism, abuse of power, corruption and waste. Schools and hospitals are crying out for funds, but the government is spending public money on ceremonies, politicians’ junkets, etc. The SLPP and UNP are behaving as if they were deriving some perverse pleasure from people’s hardships. One wonders whether the ruling politicians are inflicting suffering on the people by way of punishment for rising against them. They robbed the country and bankrupted it and now they are trying to use its bankruptcy to stay in power without elections while suppressing people’s rights! What is playing out is like a gang of robbers punishing their victims with the help of the police and the armed forces!

The SLPP-UNP combine seems to be labouring under the delusion that it will be able to prevent another wave of political upheavals by crushing protests before they spread. Hence the deployment of thousands of police personnel at the drop of a hat. Let the government be warned that its strategy is bound to fail, and it is playing with fire. Public anger has already passed the tipping point, and the next wave of popular uprisings may be only a matter of time. When a tsunami of public anger makes landfall, there is no defence whatsoever for a repressive regime; the police and the military will not be able to defend it however pampered they may be.

Friday’s goon attacks at Maradana could be considered a dry run of what the government is planning to do on the day of the upcoming local government elections, which it cannot win. There is hardly anything that a beleaguered government that fears an election will not resort to avert a crushing defeat in midterm. The Election Commission, the Opposition, the media and election monitors should remain Argus-eyed. The SLPP local government politicians demonstrated what they were capable of when they took on the Galle Face protesters last year.

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Editorial

Income tax

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It is very clear at present that the new income tax net cast by the Ranil Wickremesinghe government has provoked a situation that may well become unmanageable and ominous signs of this are clearly emerging. Strident protests from groups including doctors, university academics and others including port and airport employees and many others have been becoming increasingly strident over the past several days. Hints of direct trade union action, obviously meaning strikes, have been made. Whether a government, already on the back foot following Inter University Students’ Federation (IUSF) Convenor Vasantha Mudalige’s release on bail and angry public opinion railing against blatant efforts to postpone the scheduled local elections. can fend off the tax protests remains to be seen.

All those protesting on this account well know that the government is desperately cash strapped and needs to urgently harness revenue to keep the wheels of state turning. On its part, the government also is too well aware of the inability of most of the protesters to bear the new income tax burden in the face of galloping inflation, particularly food, electricity and a host of other goods and services are concerned. But there is very little that it can do about it. Wickremesinghe’s and his government’s obdurate refusal to abandon or cut down on Saturday’s 75th Independence anniversary bash, said to have cost Rs. 200 million, has only aggravated public fury about the new income tax burden placed upon the people.

The very small number of personal income tax payers in this country have always felt unfairly treated, believing they have been singled out for harsh treatment while the vast majority remained untouched. They could not be more wrong. All the people of the country pay taxes and how! As one famous newspaper editor of the past pungently put it, “every time you strike a match or flush the toilet, you are paying a tax.” We all know the platitude that the only thing that is certain in life is death and taxes. Indirect taxes unlike those that are direct (like income tax) by far account for the lion’s share of tax revenue. Populations of developed countries, particularly in Europe and North America, pay high income taxes. But they, unlike us in Sri Lanka, get good returns for what they pay. We, in this land like no other, can only grin cynically when we see signs proclaiming “Your tax rupees at work” at road digs and construction sites and think “like hell” to ourselves.

Equity is a basic principle of taxation long ignored in this country. Go back to 1977 and the early years of opening our long shackled economy by the J.R. Jayewardene government with Ronnie de Mel as finance minister. That was when public service emoluments were freed of income tax on the argument that top public servants were paid much less than their private sector counterparts and this hindered government’s ability to hold competent managers in the public sector hierarchy. The contention was not altogether without merit but there were many fallacies as well. Public servants from the colonial days have enjoyed non-contributory pensions which is not the case (with very few exceptions) in the private sector. Dr. N.M. Perera, as finance minister in Mrs. Bandaranaike’s United Front government of 1970 tried, without success, to withdraw the pension benefits from new entrants to the public service. He sensibly proposed that they be paid a retirement benefit like what is offered by the EPF to private sector employees with contributions from both employer and employee. The failure of this effort has left a ticking time bomb on the taxpayer’s lap to this day.

At a post-budget press conference following freeing public sector salaries from income tax, then Finance Minister De Mel was asked whether parliamentary emoluments too would be similarly exempted. He ducked the question saying “that hasn’t been decided yet.” Of course the benefit was extended to MPs too. Cabinet Spokesman Bandula Gunawardene told a post-cabinet news briefing a few days ago said that the IMF wanted all those earning Rs. 45,000 a month to be made liable to income tax. The government tried its best to push it to a monthly Rs. 150,000 and finally settled at Rs. 100,000. There were those who didn’t believe the minister on the premise that an institution like the IMF would not have got into micro details but would have broadly prescribed a percentage of GDP that must be gathered as tax revenue. However it wasn’t long before the president himself confirmed Gunawardene’s claim.

There’s no avoiding the reality that Sri Lanka’s income tax base is far too narrow and needs to be widened substantially. This would mean that people who have never paid income tax would caught up in the tax net and would deeply resent being compelled to pay. This is particularly so in the context of the value of money reducing sharply, most so in recent months. The country is also saddled with an Inland Revenue Department entrenched in a tradition of harassing already squeezed lemons to increase tax collection in a society where evasion is widely prevalent, often among professionals who should know better. The government must also be cognizant of the untaxed, lavish non-cash benefits of politicians deeply resented by the people. However that be, whether the government will be allowed to implement the announced scheme or be compelled to backpedal remains to be seen.

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Editorial

Independence, democracy and franchise

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Saturday 4th February, 2023

The SLPP-UNP regime is celebrating ‘Independence’ on a grand scale today while trifling with people’s sovereignty, which includes the power of government, fundamental rights and franchise. It makes no bones about the fact that it is all out to delay the local government elections and deprive the public of an opportunity to exercise their franchise. It is pulling out all the stops in a bid to throttle the electoral process by denying the Election Commission funds for conducting the mini polls scheduled for 09 March.

The government is doing exactly the opposite of what the SLPP promised in its manifestos presented to the public before the 2019 presidential election and the 2020 parliamentary polls. It does not heed public opinion at all and bulldozes its way through. Sovereignty resides in the people and all government authority emanates from them, and therefore they must be able to exercise their right to vote and thereby express their opinion on how the country is being governed. A regime that undermines people’s power of government and franchise cannot be considered democratic.

The SLPP-UNP government also stands accused of violating people’s fundamental rights. Convener of the Inter-University Students’ Federation Wasantha Mudalige, who was released on bail recently, has levelled a very serious allegation against the government. He says an attempt was made to kill him while he was in police custody. Besides, it has now been revealed that he was wrongfully arrested under the Prevention of Terrorism Act (PTA); the Colombo Magistrate’s Court has cleared him of charges pressed against him under the PTA. He is planning to file a fundamental rights violation petition against the police and others responsible for pressing trumped-up charges against him and his illegal detention under the PTA.

The incumbent dispensation has thus proved that it does not care two hoots about the people’s fundamental rights, power of government and franchise. It is therefore without any legitimacy to exercise people’s legislative, executive and judicial powers.

Mudalige’s serious allegations against the police evoke one’s dreadful memoires of the reign of terror in the late 1980s, when abductions, torture, disappearances and extrajudicial killings were the order of the day. The politicians and their hired guns who committed heinous crimes in the name of counterterrorism, in that era, and some former southern terrorists and their hit squad members are still around.

Old habits are said to die hard. It is being argued in some quarters that the wave of retaliatory violence that swept across the country following SLPP goon attacks on the Galle Face protesters on 09 April 2022 bore the hallmarks of southern terrorism the country witnessed in the 1987-89 period; widespread arson attacks on the ruling party politicians’ properties were well-coordinated and swift; they were far from spontaneous, and the same is true for the abortive attempt to take over Parliament in July last year. The UNP, which unleashed barbaric counterterrorism, is in power, and the JVP is threatening to launch a wave of protests if the mini polls are postponed.

It is said that those who do not learn from history are doomed to repeat it. The J. R. Jayewardene government made a colossal blunder by doing away with the 1982 general election, and holding a heavily-rigged referendum, instead, to retain its five-sixths majority in Parliament. Its interference with the country’s electoral process intensified public anger, which the JVP effectively tapped to fuel its second insurrection. The youth were resentful and rose against the repressive regime. Mahinda Rajapaksa took up the cudgels for the rights of the victims of state terror and returned to national politics in the late 1980s. But today, his party, the SLPP, and the UNP have closed ranks, and are apparently creating conditions for another conflagration.

If a general election had been held in 1982, that would have helped defuse tensions and release pressure in the polity, and the JVP would not have had a casus belli to take up arms and mobilise the youth.

One can only hope that the local government polls will be held as scheduled and the people provided with an opportunity to give vent to their anger democratically and jolt the government into making a course correction so that the country will not witness another catastrophe.

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