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| Sunday, 14 November 2004 |
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Features |  |
| News Business Features Editorial
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Pre-budget survey : Great expectations Sunday Observer staffers Rohan Mathes, Deepal Warnakulasuriya, Jayantha Sri Nissanka and Jayampathy Jayasinghe fanned out to interview persons from different segments of society to ascertain their views on the forthcoming Budget. Finance Minister Dr. Sarath Amunugama is to present the maiden budget of the United People's Freedom Alliance (UPFA) Government on Thursday, November 18. An Executive Officer in a government bank:
The general public having some expectations is obvious at budget time. Any government blows its own trumpet before the budget and then draws comparisons with what the Opposition did when they were in power. I think, the younger generation today understands this situation and they do not conjure expectations or rely on promises of politicians. What I believe in is that politicians or intellectuals of this country
still have a chance to go for a national policy that doesn't change when a
government changes. Until this is realised by the relevant authorities a
budget is 'nothing' or only an annual document to fill the space of
newspapers.
Pix by Chinthaka Kumarasinghe Thilak Chammika Kumara, an employee at a textile shop in Fort: Every year we expect something from the budget as the cost of living is so high in comparison to our hand to mouth salaries. The prices of almost all the necessary items have gone up. People live just because they should live. In my case I think, what our country needs is a long-sighted economic plan and not the plasters just for politicians to enjoy their voter base. We poor people even have plans for our kids and we make them realise those step by step. A government too should have such concrete future plans. D. R. Rupasinghe, an Executive Officer in a private company: We have a lot of expectations. A salary which is enough to engage in our daily activities, a satisfactory public service, a good transport service, satisfactory education for our children are some major expectations. I don't think that any government after Independence had a genuine concern to develop the country. The other thing is that suggestions or plans only for micro economic development are not enough. Those should be implemented and continued for better results. The public will make sacrifices if the rulers come forward with a true sense. Udaya Senadhipathy, an owner of a Communication Centre in Pettah: I think this year the budget will bring some benefits including a salary increase for the general public. As the present government is free from bribery or corruption they can do something better. However, they will also be unable to fill the gap between the Cost of Living and the budget benefits. I also heard that the government is going to have some large-scale development plans. But my experience is people look for quick benefits and say nothing has been offered this time too. It is only a few people who know that a budget cannot solve all the problems at one go. Chamber of Construction Industry (CCI) President Surath Wickremasinghe: The CCI acknowledges the government's need to raise revenues to reduce the 'Fiscal Deficit'. This could be achieved by widening the tax base via the capture of a larger number of tax defaulters as opposed to increasing the tax burden on employed professionals in particular, and the existing tax payers. The establishment of Public/Private Partnerships to drive the economy and the provision of utility and other allied services with the objective of enhancing efficiency of the public sector is advocated. Foreign Consultants and Contractors not paying taxes should be netted. Prior to entering into contracts in Sri Lanka, they ought to open tax files and be registered for statutory dues. Legislation should be introduced to bind contracting parties to declare that they are registered for income tax and VAT and disclose the file numbers. Foreign employees of foreign contractors are presently charged a flat rate of tax, irrespective of their earning capacity. This should be changed to make it mandatory that all such foreign personnel should be taxed on the same basis that employees of Sri Lankan contractors are taxed. Revenue leaks due to foreign contractors not registering for taxes are substantial though it has not been qualified. The CCI accepting the 'Economic Service Charge' (ESC) as a reliable revenue earning measure, however points out that the construction sector being a vulnerable sector, be subjected to a lower rate as 0.25 per cent. It is also proposed that the government introduces a levy of about 0.5 per cent of the contract value, to be credited to a special fund which may be managed by the Institute of Construction Training and Development (ICTAD) with industry representations, on every construction contract awarded, irrespective of the source of funding and the nationality of the contractor. This could be similar to a cess, supplementing the recurring expenditure of the Treasury in respect of all construction industry development programmes such as training, disbursed from the Consolidated Fund. The government acting in the capacity of a catalyst, should consider initiating some mega projects with foreign investment immediately, to kick-start the construction industry and generate employment. Veteran media person Ariyadasa Peiris: He expects a people-friendly satisfactory budget which would bring down the cost of living (COL) and other added benefits to the people. However, people should not expect too much as the government is at present saddled with a financial crisis. Given the time and a chance, I am confident the Alliance government will deliver the goods expected of them. Renowned Film and Teledrama Producer and Actor Sahan Wijesinghe: The budget is of less significance now as things change overnight sans any prior notice and not in the annual budget. He also said that the very existence of the government relies on their maiden budget on November 18. Film Producer and Apparel sector businessman Jayatissa Tennekoon: The budget will not affect us directly. The impact would only come if the public officers who are corrupt benefit from the budget. These public officers should be weaned away from corruption as the need for corrupt practices will be minimised. Cumulatively, the whole society, would benefit due to the minimisation of corruption in the public service. The present government has taken measures to uplift the rural economy of the country which is vital for the sustenance of the Small and Medium Industries (SMI) where a number of rural folk are employed. Senior Vice President of the Federation of the Chamber of Commerce and Industry of Sri Lanka Nawaz Rajabdeen : It will be an asset if the government goes ahead and sets up a separate bank for the SMI sector where borrowing can be more flexible for small industrialists than from a traditional bank. Traditional banks on the contrary demand co-laterals for borrowing and often do not re-schedule debts for rural folk that puts them in difficulty. Setting up of agro based industries in the rural areas will uplift the rural economy which is essential for the well being of a country. Crime is on the increase today due to several social factors. The governments in the past did not uplift the rural economy as expected. Fortunately the SMI Sector now comes under the President and much could be expected. Taxation should start from the top and not from the bottom line for the benefit of the small businessman. Mr. Nihal Fonseka of the National Chamber of Commerce of Sri Lanka : The Chamber had proposed to the government to provide incentives such as raw material for the agricultural, fisheries and the livestock industry for the upliftment of the rural economy. The Chamber however did not request the government for any tax concessions. However the Chamber requested the government to broad base the tax base by having a uniform method both for the private and the state sector and to expedite the collection of taxes from defaulters. Each tax file should contain the national identity number of the tax payer to make it difficult for the tax payers to evade paying taxes. Ceylon Chamber of Commerce President, Deva Rodrigue: The budget proposals of the chamber were submitted to the Ministry of Finance this September. The CCC recommendations were based on three Macro policies like accelerating the economic growth to a level of 6-8 per cent, reduction of poverty, reducing the budget deficit under per cent GDP in 2005 and then to 5 per cent in the medium term. The primary goal of budget 2005 should be to set out clearly the Governments economic, fiscal and social policy directions and development path for at least the next three years. It has also outlined peace, political stability, law and order, good infrastructure, consistent investor friendly policies, macro economic stability, fiscal responsibility, and good governance. The main thrust of the Ceylon Chamber budget proposals is to keep the budget deficit to 8 per cent of GDP or less in 2005. According to available data and projections of expenditure this would require the government to raise at least Rs. 35 billion as additional tax revenue. This figure assumes that government expenditure will be contained at 24 per cent of GDP. This level of expenditure includes the cost of subsidies of fertiliser, Kerosene, and other subsidies presently granted to provide relief to the poorer of the society. Sri Lanka's Trade Union sector The Government should introduce a National Policy which would actually increase the purchasing power of the people than granting monetary salary increases of the working class. "Every Government to be popular gives pay hikes. But the working class is suffering as a result because the prices of goods and services double after pay hikes. In reality budgets heap more burdens on the poor. Therefore, what is required is to increase the purchasing power of people. General Secretary of the Ceylon Federation of Trade Union D. W. Subasinghe: The Budget should bring a statutory provision to increase the salaries of the private sector in comparison with the increase of the cost of living. He said: The Budget should include proposals to develop the economy using internal resources without increasing the foreign debt. Economic development should create more jobs to absorb unemployed youth to a gainful employment in order to end the supply of cheap labour. President of the Public Service Trade Union Federation W. H. Piyadasa: The Budget should aim at providing more economic benefits while bringing proposals to speed up the development work of the country. A National Policy should be introduced on a pay hike. The UNP brought proposals to help the crooks at the cost of the working class. The best example is the Tax Amnesty Bill. The UNP scrapped Samurdhi and other benefits for the poor but gave billions to the businessmen from the Tax Amnesty Bill. Therefore, what we expect from this Government is to reduce heaping more burdens on the poor but increase more taxes on the affluent. The Budget should induce farmers and Small and Medium scale industrialists to engage more in their fields as many of them have given up their occupations. Veteran Trade Unionist of the CMU Bala Tampo : I do not expect anything from this Government because the Government does not serve the people. Already a number of Ministers had increased to 80. Vice President of the Ceylon Banks Employees Union S. B. Abeysekara : The salaries of the working class should increase over and above the increase of the prices of goods and services. It is no point if prices are increased more than the salaries. What is important is that the real purchasing power of people should increase than the nominal pay hike. Therefore, a National Policy should be introduced to grant pay hikes while keeping prices static. It is no use for Trade Unions to yell at Governments to get salaries increased if prices go up after the Budget. Leaders of this country should have a vision to develop this country on a national economic policy. General Secretary of the Sri Lanka Nidahas Sevaka Sangamaya Leslie Devendra: Our trade union forwarded four proposals to the Finance Minister on behalf of the working class. They are: (1) Salary anomalies in the Public Sector should be resolved based on the Tissa Devendra Commission Report. (2) Since this report was introduced in 1991, when salaries are increased in 2004, the cost of living between these period should be taken into consideration. (3) Salaries in the private sector should also be increased. Since there is a dispute as to how to do so, a strategy should be prepared in consultation with every party. (4) We believe that increase of salaries is not the solution for the cost of living. Increase of salaries will also increase cost of living. It heaps more burdens on people. Therefore, we need a long-term solution to contain the cost of living and increase the purchasing power of people. |
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