The 2013 Budget is in line with his earlier budgets — promoting the business interests of the capitalist class, hiding more than the real thing and painting it in rosy terms, a leftist trade union stated. The Ceylon Federation of Labour (CFL) said the working poor, wage earners in the private sector and those who [...]

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The Sundaytimes Sri Lanka

Budget serves capitalist business interests : CFL

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The 2013 Budget is in line with his earlier budgets — promoting the business interests of the capitalist class, hiding more than the real thing and painting it in rosy terms, a leftist trade union stated.

The Ceylon Federation of Labour (CFL) said the working poor, wage earners in the private sector and those who labour in the informal sector; all of whom who make a significant contribution to the local economy have been ignored in the budget.

“Instead of bringing relief to these sections, they are being exhorted to submit themselves to intensified exploitation by capitalist employers to improve their businesses. What is being deliberately denied in the process is the central place wages occupy in raising productivity,” the union said in a statement.

It said wages in the private sector are increasingly and constantly under pressure with wage rates trailing behind the increase in productivity resulting in a shift of gains to capital at the expense of labour. The CLF said the Minister of Finance (President) seems to be oblivious to this fact. Policy induced wage restraint in the private sector has the direct result of weakening the morale of workers leading to industrial unrest. It is by no means a strategy for economic development, it noted.

“The claim of per-capita GDP at US$ 2,800 is misleading. With heavy investment in infrastructure (with borrowed money) there is bound to be GDP growth. Translating this growth into per capita GDP in US dollar and divided by the population means in rupee terms Rs. 308,000 per year or Rs. 25,700 per month. According to the official DCS Report for 2010 the average income was Rs. 9,104 per month. According to the same report the median income was lower at Rs. 5,803. Thus the per capita GDP means little to the larger population,” the union added.

“While it is claimed that the rate of inflation is on the decline we witness the paradoxical situation of the price index rising. The very fact that the government has thought it fit to give a cost of living allowance of Rs. 750 to public sector employees is proof and acknowledgement of the steep rise in consumer prices,” it said.

The Rs. 1,500 allowance for public servants and the increases given to pensioners and others are sure to be wiped out due to inflation, the federation said.

“Instead of using taxation as a tool to ensure income distribution the government’s taxation policy exacerbates income inequality. Taxation ratio in Sri Lanka has been declining and remains well short of the average rate of developing countries. A noticeable feature is the increasing reliance on indirect taxation than on direct taxes heaping burdens on the least bearable sections of the people. The plaudits the budget has received from capitalist business circles in the country is an indication of the interests it serves,” it said.




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