Ceylon Today Editorial

AUSTERTY, HIDING BEHIND DEBT CRISIS!

16 September 2016

 

Recently, Health Minister Rajitha Senaratne said that Budget 2017 will be presented to Parliament on 10 November. This budget is crucial for the government as well as to the public due to multiple reasons.

At the moment, the government is caught between the devil and the deep blue sea. On one hand it has to meet the targets provided by the International Monetary Fund (IMF) and on the other hand the expectation of the public has to be met from the upcoming budget.

To put it in simple terms, the budget is nothing, but managing the expenditure and income of the government. However, it becomes a tough job when there is a big gap between the expenditure and the revenue. The bitter truth is that the government revenue in Sri Lanka has been very low for decades and that had pushed the country into a fiscal crisis. The IMF notes that Sri Lanka is amongst the countries that have the lowest tax to GDP ratio and alarmingly that ratio has been declining throughout the last decade.

Tax is the main source of revenue for any government; hence if the fiscal deficit which resulted in increase of the government expenditure is to be met, the tax revenue should increase. According to the Central Bank of Sri Lanka (CBSL) Annual Report 2014, the tax revenue as a percentage of the GDP had reduced to 10.7% from 11.6% in 2013. Economists as well as the IMF had consistently cautioned the previous government about the falling revenue. Despite all those cautions the total revenue of the government had declined from 13.3% of GDP in 2013 to 13% of GDP in 2014.

According to the CBSL, the medium term objective of the government is to reduce the budget deficit to 3.5 per cent of GDP by 2020. Which is also the target given by the IMF when Sri Lanka obtained the Extended Fund Facility recently. In line with this, regressive taxes are also expected to be minimized while increasing the ratio of direct and indirect tax generation in the medium term to 40:60 per cent from 20:80 per cent.

However, it is a question whether the government genuinely wants tax imposed on the common man. Despite the claim of the Prime Minister of reducing the indirect and direct tax ratio to 60:40, the indirect taxes such as VAT are imposed on consumption making more trouble for the common man.
It is true that the increase of government revenue is not an option, but a must. However, the question is the way in which the government attempts to do that. The so-called, economic experts thus far had failed miserably to raise the revenue without hurting the common man, although they harshly criticized the previous regime when they were in power.

Failing in the attempt to raise government revenue, the government might look into cutting expenditure. Again, it is a question from which sectors expenditure would be cut. Prominent economists had argued that cutting public expenditure had by no means increased growth rates; instead it had reduced not only the growth rate but also employment rate. On top of that, such actions to cut out public expenditure which are known as austerity measures had resulted in reducing the standards of living of the public.

It appears that Prime Minister Ranil Wickremesinghe is trying to implement such austerity reforms hiding behind the debt crisis. Recently, he had claimed that the government debt has exceeded Rs 10 trillion and it has become a serious concern. This was not a new problem. The massive public debt was an issue that the government has been facing throughout the last decade. Therefore, the government should find a way from the budget to pay those debts without further taxing the ordinary people.

Moreover, Budget 2017 is a tough test for the government. Maybe, they will have to make tough decisions. However, the government must make sure that such tough decisions would benefit the public, not a few individuals with vested interests.

Daily News Editorial

Doctors at war

16 September 2016
 

The conduct of the GMOA doctors hit a new low on Wednesday when some 200 of its members laid siege on Isurupaya that houses the Ministry of Education, well into the wee hours of the morning demanding elite schools for their children. In the melee one of the doctors fainted in a scene reminiscent of common agitations by unruly trade unions on the streets of Colombo, a blot on the local medical profession, in more ways than one.

This is the first time in known history that a set of doctors had deigned to lower themselves into the level of the ordinary trade union riff raff, throwing to the winds all dignity and decorum attached to their profession. At the time of writing the doctors had been evacuated from the Isurupaya premises on a court order obtained by the police.

It is clear that the GMOA has opened another flank of attack against the government, with its other agitations losing steam. First it was ECTA, purely a trade agreement with a neigbouring country, that may or may not benefit the country’s economy, but an issue completely out of the remit of the medical profession. Then there was SAITM, which on the face of it seems to have some relevance to the GMOA, but an issue that is not of recent origin but dating back to the Mahinda Rajapaksa regime. One cannot recall though the GMOA come out with all guns blazing then, as it is doing at present. Ditto for the matter of the Indian doctors serving at the Lanka hospital, which give credence to the claim by Minister Dr. Rajitha Senaratne that the GMOA was muzzled by Gotabhaya Rajapaksa.

True, the doctors have a grievance. They are at a disadvantage when admitting their children to top government schools, being subjected to transfers every four years and due to intervening scholarships abroad, that invariably disqualify them, based on the residency rule. But they also ought to see things from another point of view. There are quotas allocated for children of the security forces, MPs, Ministers and Administrative Service officers in government schools. The GMOA boasts of a 20,000 membership countrywide. Even conceding that not all these doctors may not have children of school going age, or married for that matter, it still would be an impossible task to accommodate such a large number of children to Royal, Ananda, Visakha, Dharmaraja, Kingswood, Mahamaya, High School Kandy Maliyadeva etc., the schools that are being insisted upon by the doctors that their children should be admitted.

It smacks of selfishness by the GMOA who always claim to have the public interest at heart in all of its agitation campaigns. Is the GMOA insisting that its children be admitted to only these schools and to hell with the others (children of the security forces, MPs etc.) It is clear that the doctors are spoiling for a fight with the government after its anti-ECTA campaign has all but foundered (The Indian ambulance service to which it vehemently opposed is operating without a hitch). It is incongruous that the GMOA has decided to stage a token strike at the main state hospitals in Kandy, Kurunegala and Matara to highlight their children’s school admission issue. What have the poor patients, who will be inconvenienced and undergo hardships by this strike action got to do with a doctor’s child’s school admission? Is the GMOA of the view that these patients are going find common cause with their members, going by the difficulties encountered today by the ordinary folk to get their children admitted to even an ordinary school?

It is time, the GMOA, which is the most powerful and influential professional body in this country, do an introspection and make a course correction. It should not be made to be seen as just another trade union downing its tools at the drop of a hat. Its agitations should be reserved for larger issues that primarily affect the patients and the community at large. This is because they owe it to the public for elevating them to their present status in society, through funding their education. The doctors should not compromise their professional integrity by dabbling in mundane matters.

The Government, on the other hand, should consider giving priority to doctor’s children in school admissions by dispensing with the residency rule, considering their importance in creating a healthy nation. Besides, doctors are engaged in a noble profession, ministering to the sick and making other sacrifices such as being ‘on call’ duty round the clock. It should also bear in mind that Sri Lanka is confronted with a dearth of professionals, particularly in the medical profession, due to the lure of greener pastures. Doctors on their part should be circumspect and avoid precipitate action, as that witnessed on Wednesday, at Isrurupaya. Continuous running battles with the government is unbecoming of an elite profession, such as doctors. Their Trade Union action should always be as a last resort after exhausting all avenues of redress to their grievances.

The Island Editorial

When thieves fall out

16 September 2016

 

Hardly a day passes without a Joint Opposition (JO) MP or someone close to him or her being arrested, arraigned on various charges and remanded. The CID took former Minister and JO activist Mahindananda Aluthgamage, MP into custody to question him on money laundering. He was later remanded. The Supreme Court has directed the Commission to Investigate Allegations of Bribery or Corruption (CIABOC) to file a case against former President Mahinda Rajapaksa’s son, Namal Rajapaksa, another JO MP for contempt. Now, it’s double whammy for the young JO MP in hot water.

The public perception is that bribery and corruption were rampant under the previous government whose leaders shielded the corrupt who were loyal to them. The present administration vowed to investigate allegations of corruption, among other things, against their rivals and bring the culprits to justice. It has got into overdrive in a bid to achieve its goal. Those who acted with impunity in the heyday of the Rajapaksa government and lined their pockets at the expense of the public must be made to pay for their sins.

The apex court has earned public plaudits during the past several months for its bold rulings and observations. Therefore, the right thinking people will not frown on its directive that the CIABOC file action against Namal. No one who has helped himself or herself to public funds or abused his or her position to acquire ill-gotten wealth should be spared.

However, the manner in which the government is trying to deal with the corrupt elements in the previous government has left one intrigued, to say the least. Some rogues of the former dispensation have been let off the hook to all intents and purposes. Is it that only the former members of the Rajapaksa government, currently in the JO, were responsible for corrupt and other illegal operations which proved to be that administration’s undoing? Have those who ditched the Rajapaksas after the fall of government last year, switched their allegiance to the Sirisena-Wickremesinghe government and are holding ministerial posts been able to cleanse themselves of their sins so easily? Why is it that neither the much-dreaded FCID nor the CID nor the CIABOC has swooped on them? Will the JO MPs also enjoy that kind of legal immunity like those responsible for the Central Bank bond scams if they join the government?

Meanwhile, have any ministers been summoned by the CIABOC? If so, have all of them appeared before it? Has the commission taken legal action against those who haven’t done so? Is it true that a powerful minister has refused to answer its summons with impunity? And, what action has the CIABOC taken against him for contempt? Will some JO worthies ask in Parliament how many MPs have been asked to appear before the CIABOC and how many have ignored the summons?

It looks as if we had to wait till the next change of government to have allegations of corruption against the members of the present administration probed and the culprits brought to justice. It is being claimed in some quarters that the government has launched a witch hunt against its opponents. One thing good about the action being taken against the JO is that its members will have their rivals currently savouring power probed if they come back to power. The FCID and the CID will be used for that purpose.

People always stand to gain when thieves fall out because the latter tend to squeal on one another after breaking ranks.