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| Friday, 21 November 2003 |
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The Lanka Sama Samaja Party (LSSP) in a press release issued yesterday said the government's budget proposals for 2004 take still further the UNP's commitments to the IMF. It said: "The LSSP recognises that the UNF Government's Budget proposals for 2004 take still further the UNP's commitments to the IMF. The modification of the VAT proposed in this Budget can be taken as a case in point to support our position. The last Budget which imposed for the first time the VAT, said this tax will cover the retail and wholesale trade from July 2003. On this the IMF observed publicly that the VAT has not gone far enough. In July 2003 it was only the VAT on the wholesale trade that was put into effect and that on the retail trade was allowed to lapse because the revenue authorities had said that given the almost chaotic character of this trade the tax on it cannot be collected. By this the government had certainly lost a sizeable portion of estimated tax revenue. But in this budget it has made up for this. With its raising of the earlier 10 percent tax to a 15 percent it has estimated for an additional Rs. 2000 million thus satisfying the IMF on the earlier shortfall. Though this is shown as a benefit given to the consumer its impact is bound to effect drastic cuts in the living standards of the mass of the people. In the area of the state welfare services too, this budget will have the same malefic effect. Linked to the low 10 percent salary hike is the proposal to cut down the number of people in the Public Service. Incentives are proposed to motivate public servants to retire. It fulfills the IMF condition that the public service must be reduced in numbers. A 35 percent reduction was what the IMF had always pushed for. What this will mean in fact is that there will be a cut back in the public services such as the provision of free education and health services: a large portion of the welfare sector in this country will be drastically affected. The UNP Government has further kept to the IMF 'conditionalities' of old just at the time the IMF top men have been forced to concede that in the past this organisation has mishandled Third World countries on their inherent economic problems and imposed on them conditions and stipulations that did them no good. It is a fatality of Third World capitalist regimes to drive their countries and peoples to untold suffering and disaster by adhering to the impositions of the IMF. Taking this background into consideration the LSSP reiterates that it sees no credibility or good faith in parties criticising budgets of this nature without renouncing their fictions mainsprings - the assumption that the private sector is the engine of growth deregulation and the privatisation of state owned enterprises and leaving the local agriculturist and people's sector and the small and medium scale commercial and manufacturing entrepreneurs to the mercy of market forces in an open economy. The LSSP calls upon all progressive forces to ensure that parties aspiring to governmental power on their behalf commit themselves to positions that are a rejection of IMF 'conditionalities' as are now well recognised." |
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