Financial Times

Doubts over fate of budget
Serious questions have arisen about the fate of the forthcoming budget for 2006 that the government is insisting on presenting on November 8, just days before the presidential election, but which the opposition United National Party is strenuously objecting to.

The UNP’s objections are based on the very justifiable possibility or fear that the ruling People’s Alliance coalition party could use the budget to present sops to the voting public in order to influence the vote at the forthcoming presidential poll.

In all probability it could be an ‘election friendly’ budget, with an eye on winning over the allegiance of voters, that could have the effect of further weakening our already weak economic fundamentals, as opposed to an investor friendly one designed to woo investors and put the economy back on track, which is what this country sorely needs.

Whether by accident or design, the budget debate and the final vote on the budget will take place only after the presidential poll, which means that the opposition UNP will have no chance of defeating the budget before the election.

Be that as it may, the ultimate fate of the budget is far from certain.
There are real doubts whether the ruling party could manage to have the budget passed and what would happen if it is defeated even after the presidential poll.

Although the government has expressed confidence that it would be able to get the required majority to pass the budget, there are question marks over this claim.

The UNP has been crying foul over the timing of the budget and its fears are well justified given the penchant of incumbent ruling parties to use state resources and budgets to win over voters. Adding fuel to the fire is the JVP’s Wimal Weerawansa claiming that Prime Minister Mahinda Rakapakse’s election manifesto will set out the economic policies that are to be included in the government’s 2006 budget.

This is a clear admission, whether intended or not, that the budget would be designed with the election in mind and that it would be packed with incentives and subsidies designed to woo voters.

Of course, Weerawansa’s point was that this would allow Rajapakse to implement his campaign promises. But that claim is rather naïve and can only be greeted with disbelief given the strong possibility that the budget would be defeated even in the event Rajapakse wins the poll.

If Rajapakse loses and Ranil Wickremesinghe becomes president it is unlikely he will continue with the budget of his rival candidate, especially given the marked differences on economic policies between the two.

Chances are that Wickremesinghe, if he wins, will scrap the People’s Alliance budget and present his own as his economic policies have a decidedly neo-liberal flavour compared with the more left leaning and markedly socialist policies of Rajapakse, although voters would be excused if they are confused at this stage and find it hard to tell the difference given the plethora of subsidies which Wickremesinghe himself is promising if he wins.

The government can argue that it is not compelled to postpone the budget which is usually scheduled at this time of year and go for a vote on account to tide over the period covered by the polls and its immediate aftermath. But a budget on the eve of a crucial election could certainly give the ruling party’s presidential candidate, Mahinda Rajapakse, a decidedly unfair advantage. This is something that the Elections Commissioner and other polls watchdogs should look into although it remains a moot point whether anything could be done about it, especially at this late stage.

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