Sunday Island Editorial

Revenue and expenditure

02 October 2016

 

The Lankan people are too well aware that government revenues are woefully inadequate to meet government expenditure. This situation which gets worse with every passing year is dinned into any and everybody by political leaders who harp on their predecessors’ profligacy while doing precious little to correct the situation. They are more than willing to do the grand themselves at public expense while ensconced in office. The political class has progressively fattened itself from state coffers as well as pita vaasi (fringe benefits) from illegal gratifications, commissions, kickbacks and what have you for the past several decades. While we hear incessantly about the need to increase revenue, there is little or no talk at all about reducing expenditure; extravagance in the government sector, highlighted now and again in the national press like the story of sandwiches from a five star hotel costing Rs. 1,200 each to be served at the Police Day celebration are examples. That was stopped in the nick of time, thank goodness. Jumbo-sized cabinets costing more than a mint are the norm today and a few days ago there was a report, not refuted up to now, about secretaries of ministries being entitled to lease high-end cars like Mercedes Benzes and BMWs at Rs. 500,000 a month! While leasing them would certainly cost less than buying and maintaining them, cannot our senior officialdom ride in less ostentatious luxury? But their political bosses have already set the bad example with their vehicles bought at taxpayer expense!

We know all about the debt/GDP ratio. We have been treated with a welter of facts and figures of how much of government’s revenue must be spent to service the national debt, never mind capital repayments. There have been functionaries who held high office who dismissed extravagances like the big bucks that were spent in the bid to host the Commonwealth Games here as a mere drop in the ocean in terms of GDP. That was no doubt true. But the fact is that ordinary people look at who spends that money and how much of it is spent on themselves. They highly resent that those who presented themselves at elections as coming forward to serve the people are only serving themselves. The so-called unfinished Lotus Tower rising obscenely into the Colombo skyline must surely rankle. What earthly use is this white elephant, like those created at Hambantota, going to be for the people of this country except cost them plenty? What do they care if we have the tallest building in South Asia, albeit at a cost of over 100 million dollars, and how many of them are going to be able to afford the various luxuries it will offer once completed? For a country our size, we have enough television and radio stations today and the available communication facilities of the tower risk the fate of the port without ships and the airport without planes.

Politics, it is said, is the art of the possible. So we have defeated candidates appointed on the National List to Parliament and anointed with cabinet office to boot so that a so-called unity government can have a parliamentary majority; that plus the balancing act between President Sirisena’s SLFP and ex-President Rajapaksa’s Joint Opposition require the conferring of office on various politicians for support comes at a price. The lame excuses that we have heard ad nauseam notwithstanding, the much postponed local elections will have to be held sooner than later. Whether the president’s SLFP faction and the UNP which is its partner in government will be able to reach some practical accommodation that will help each other, or whether both parties will field their own slates, remains to be seen. As has almost always been the case, a united opposition has always been able to overcome the UNP while the greens have benefited from a divided opposition. Will history repeat itself at the forthcoming local elections? Local bodies too cost the taxpayer. But they too, like other elected institutions like the provincial council white elephant, add to burden on the public purse. Both can play a role in the administration of the country. While it can be said that the older local councils, be they municipalities, urban councils or humble village committees (now pradeshiya sabhas) despite many weaknesses have played a useful role, have the provincial councils?

Let us hope that Finance Minister Ravi Karunanayake, when he presents the 2017 budget next month, take cognizance of government expenditure which is way too high for a country of our size and resources. Our public service is bloated and carrying far too many passengers that the economy can ill afford. But reducing the numbers is not politically possible. Everybody knows that last year’s public service pay hike which the former president has called a "bribe" was intended to win the election. Rajapaksa too offered a less generous "bribe" along with sil redhi and other inducements to win votes before losing the presidential election. It’s easy enough to lavish pre-election largesse on the electorate and neither the winners nor the losers last year can plead ‘not guilty’ on this score. Given the current cost of living which can only rise further, nobody can grudge a pay increase to any sector of the population. But the question is whether the beneficiaries, or the large majority of them, earn their pay in terms of productivity? The answer sadly is ‘No’. How many state owned enterprises have had voluntary retirement schemes (VRS’s) to downsize their payrolls to acceptable levels, but after paying the incentives to retire added to the original numbers? SriLanka Airlines is one such. Jobs for the boys (and girls) are very much a part of the political credo which seekers of elected office freely indulge in at cost to the taxpayer. We can’t see it ending in the foreseeable future.