Achcharu politics in Budget 2017
View(s):
Eleven days from now, Finance Minister Ravi Karunanayake will present his second budget and in the days after that corporates will scramble to try and understand what is in there for them; firstly the tax breaks, incentives and to them personally as individuals.
Opposition politicians will beat the drums, warning of hard days ahead, tightening of belts (though however much they shout or protest, their own belts are hard to tighten because budget or not budget, price hikes or not; their girths keep expanding) while trade unions will go through the motions of complaining about cost of living or that demands for a wage hike have been ignored.
Similar to last year, the budget will be preceded by an economic policy statement by Prime Minister Ranil Wickremesinghe (which actually happened on Thursday) somewhat taking-away the gloss of a dramatic budget speech with sweeping economic pronouncements. Additionally, as renowned economics Prof. A.D.V. de S. Indraratna notes (in a recent public presentation), the tax policy was a contradiction of the Prime Minister’s statement before Budget 2016. Let’s hope that doesn’t happen on November 10.
There is no pin-drop silence anymore during the budget unlike in the days of Felix Dias Bandaranaike and Dr.N.M.Perera whose budget presentations had a strong element of drama and the unexpected in a generation of far-more competent, cleaner and astute politicians.
Apart from the corporate world (that too some sections), not many Sri Lankans are interested in the budget. “Mona budget da, Mahattayo,” a postman once told me. “Okkama eliya ne” (meaning all ‘gain or pain’ is outside the budget). That’s the feeling amongst the general public.
Come November 10, the usual drama will take place in Parliament with table thumping and hoots and jeers from both sides of the House as Ravi draws or attempts to draw the attention of the nation on how the government will raise money to administer the country in 2017.
While these thoughts were lingering in my mind, I fired a call to a senior travel personality as I needed input for a travel story. One thing led to the other and we were soon swapping anecdotes, jokes and stories on the ‘Veralu’ achchi, ‘coconut rock’ (sweet), large gardens and bright red double-decker buses in the 1970s.
A few days later I get this mail from a reader: “I was just thinking Kussi Amma Sera is an expert in making home grown ‘Achcharu’, adding various spices, pepper, salt, vinegar, chillie, kochchi miris. Later the carrots, a dash of dates and mustard are added.
“Our budget last year ended up like an ‘Achcharu’ but not as good as Kussi Amma Sera’s home-made product because she made sure to add the right ingredients in a home grown way. Her pinch of essence made it a gourmet’s delight.”
That was my cue for some musings on the budget. So here we are – a motley mix of Kussi Amma Sera, Ambarella Mama, Veralu Achchi, Ensina and Kopi Kade Hamine with some spice from ‘Koththamalli’ Sunil (Perera) and famed Chef Publis completing the ensemble as preparations get underway to present the best ‘Achcharu’ money can buy.
Now for the ingredients for our ‘Achcharu’ budget:
- Kochchi miris (Deficit – too hot to handle)
- Amu miris (Education – reduced spending)
- Pepper (Defence cuts)
- Maalu miris (Education cuts)
- Vinegar (President’s spending rises)
- Mustard (PM’s spending rises)
- Dates (VAT hike), and
- Big onion (Social welfare costs)
Of these, VAT needs a lot more stirring into the pot than any other ingredient to make it palatable to the taxpayer. Why? Because VAT rates have changed thrice since May as the Government didn’t follow procedure. The VAT rate was 15 per cent from May 2 to July 11 when the Supreme Court suspended the VAT imposition pending determination of a petition challenging the Government for not following the due process. Thereafter, from July 11 to October 31 it was 11 per cent and now, from November 2, we revert to 15 per cent.
Another VAT ‘Achcharu’ is a move to impose a 15 per cent tax on air tickets for flights originating from Colombo. While very few countries in the world impose VAT on air travel, enforcing this itself is a huge challenge. The directive is to levy VAT on flights from Colombo. So for a ticket issued in a foreign country, for example in London for a trip to Colombo and back, the passenger has to pay tax only on the return flight from Colombo. Whether international airline ticketing systems are geared for this is another issue, and our information is that, it is not. At the end of the day, the airline that would be worst affected is SriLankan Airlines because it’s the only long-haul airline from Colombo and reciprocally its ticket prices would rise adding to the many other problems the national carrier is facing.
As our team of ‘chefs’ ponders while further stirring the pot, one suggests adding more ‘miris’ in the form of parliamentarians seeking to serve communities. So ‘miris’ is added as a ‘tax’ on the people further to allow parliamentarians to travel in BMWs or suave SUVS to visit poverty-stricken villagers. “Bomu api koththamalli mokatada whisky brandy,” laughs Koththamalli Sunil.
Another additional ingredient is ‘agents and golayas of politicians’. The stirring continues until one of the chefs asks: “What about Ravi’s confession that a missing word led to a costly 80 billion-rupee loss to the nation”? That ingredient was also added into the pot and now the fragrance of ‘Achcharu’ wafts across the room. The stirring continues.
More spice is needed. Ambarella Mama suggests adding another ‘dose’ from Prof. Indraratna deadly ‘cocktail’ at the economists’ association meeting: “There is a long way to go in the elimination of waste, extravagance, corruption including favouritism and nepotism, and enforcement of transparency and accountability in public and corporate transactions, which are all attributes of good governance. There are allegations in respect of each one of these. One does not have to enumerate them; they are in the public domain and in the media and in the recent reports of COPE and COPA.”
The pot is now complete; the ‘Achcharu’ true to its word, has turned out to be a great appetiser. The ‘Achcharu’ team has a few words to say before Sri Lanka’s most famous rice- puller or appetiser is taken to Natalie Raymond’s Achcharu Kade Café at Kollupitiya: Give MS, RW and RK some kudos. After all ‘disruption’, the start-up community will tell you, is the spice of life and their bread and butter!