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Consumers are set to face more increases in the prices of food, clothing, hardware items and toiletries. Imported food items such as sprats, canned fish, chicken, beef and dairy products will become more expensive as new taxes are imposed on them.
Most other consumer products such as oils, coffee, tea, vinegar, bakery products and cut flowers will also be subjected to the increased Customs taxes, said Deputy Director of Customs, Policy Planning and Research, H. M. S. Premarathna.
Cement and paint prices are due to be increased in coming weeks.

Prices of imported food items will go up due to increases in taxes. Pix by Susantha Liyanawatte

“We were hoping that the recent Budget would provide us with relief but instead it has made it harder for people to live. Middle-income families such as mine are greatly affected by this,” said Chithrani Vitharana, 40, a mother of four from Moratuwa.

“All my children are still in school. My husband is the only breadwinner in the family. This budget made our lives even harder,” she added. Retailers as well as consumers are affected by the new taxes.

The government extended its turnover tax on supermarkets earning more than Rs. 500 million per quarter to those earning Rs. 250 million rupees per quarter, compelling smaller supermarkets to pass on the burden on the consumers.

“We already have fewer customers these days, and when the price of food and other commodities are increased there will be even fewer. The government claims that it increased the prices of imported goods in order to promote local products but we don’t have good products that meet the public’s expectations,” said Janitha Bandara, manager of a shop in Maradana.
Anula de Silva, manager of another Maradana shop, said that even though there were emerging varieties of local products most consumers preferred imported goods because they were used to them.

“There is a section of the public that always asks for imported goods believing that they are of good quality. Others are simply used to a certain type of imported product,” she said, adding that for instance, even though Sri Lankan milk was of good quality many people did not like its taste.

Consumers complain that although the tax increases were made in the name of supporting Sri Lankan farmers, ordinary people were left vulnerable because local products were in short supply and were sold at high prices.

They claim most local products are sold at a similar price to imported goods, leaving open option to buy either sort.
V. Kalaimaran, 43, from Ja-Ela said most of the time local products were not found in the market as a result of scarcity.
“Highland is a local milk product but it is not in the market most of the time. Some people say shops are doing this to increase its price even more. All we are saying is, increase local production and give the goods to us for a lower price,” he said.Consumers said they want the government to first enhance local production and then increase the price of imported goods.

“We want to have a happy life and we want our children to live without being burdened by the cost of living. If not for the increased prices of essential commodities, especially the food, we wouldn’t be complaining because all we want is to live a decent life,” said Mrs Vitharana from Moratuwa.

No vision, no compassion, say opponents

By Joshua Surendraraj

Political parties rejected the government’s claims that the November 21 Budget targeted development, saying it lacked both vision and compassion for ordinary people. “The 2014 Budget is catered to cover the cost of CHOGM 2013 and also to fund casinos,” Democratic National Alliance parliamentarian Sunil Handunnetti said.

The interest to be paid on government loans equalled annual revenue and the government would not have sufficient funds to meet its other expenditure, he charged. United National Party (UNP), MP Sajith Premadasa was no less scathing. “The Budget seems to have its foundation laid on quicksand rather than sound economic fundamentals because the indirect taxes levied have magnified the detrimental impact on people,” he said.

“The government has slashed the budget deficit by depriving the rural people of their samurdhi benefits. The people will surely feel the Budget’s pinch. It will not put a smile on their faces.” UNP parliamentarian Harin Fernando said the Budget held false promises.

“The Rs 1200 provided as a subsidy for the state sector employees amounts to an average of Rs 40 per day. Even a plain tea would cost at least Rs 25, so this won’t help them at all,” he said. “Also, only 1.2 to 1.3 million people are employed in the state sector and it is only they who receive the subsidy. The majority of the work population, amounting to roughly 6.8 million people, are employed in the private sector – there is no financial relief provided for these people.”

“Further, this Budget does not mention anything about short-term investments that could reduce the cost of living. Rather, it only focuses on long-term investments which would very well increase the cost of living.” Jathika Hela Urumaya MP Ven. Athuraliye Rathana Thero said development projects alone would not decide the economy’s path. “The Budget is unsuccessful for there is no economic knowledge in it,” he said. He alleged that the government was not driving the country with a vision.

Democratic People’s Front leader Mano Ganesan said the Budget promised 50,000 flats for plantation workers but this was not workable in the hill country. “Our demand is that these workers each be provided with 20 perches of land so that they can build their own houses,” Mr Ganesan said.

“Also, the Rs 1200 allowance won’t be of use to these people because there will be an Rs 3000 increase in the cost of living.”
Private Transport Services Minister C.B. Rathnayake said this was a Budget that targeted development. “This Budget is aimed at strengthening small industries and is quite capable of improving the country’s economy in the near future,” he said.
“We look in terms of a long-term development project and that’s why we look to long-term investments.”

Mr Premadasa, however, said the “draconian” Budget was solely aimed at fulfilling the aspirations of the super-rich while penalising the poor.