Desperation to hold on to power makes politicians do some weird things which is not new to Sri Lankans. However, it is disappointing that the leading contenders of the upcoming Presidential Election have once again descended to populist policies to ‘buy’ votes – this time targeting the voter bank of the nearly 1.35 million public employees.
Over the last two years, the messaging from the Government has been a resounding ‘tighten your belts’, don’t ask for more, as we need to maintain fiscal discipline, since there is large parity between state income and state expenditure. However, since the Presidential Election kicked off, suddenly such concerns about state expenditure, losses born by State-owned Enterprises (SOEs), the massive overtime payments made to some employees of SOEs, the need to reduce the bloated state sector seems to have vanished into thin air. And, ‘abracadabra,’ today, almost every Presidential candidate has put the state sector which was destined for reform and restructure on Santa's good children’s list for a heap of goodies.
Such vote baiting is a dangerous trend as Sri Lanka has not yet improved its state revenue collection to a level that such relief can be offered to the public sector without some other segment of state expenditure having to be sacrificed to pay for it. The tragedy is that opposition candidates and the incumbent President himself who has been resisting state sector trade union action for nearly a year and a half, stating that there are no funds to offer such relief. It is inconceivable where Sajith Premadasa, Anura Kumara Dissnayake, and Ranil Wickremesinghe plan to source funds to pay for the election promises which they are dropping on the campaign trail? Has Sri Lanka about turn and its economy improved by leaps and bounds? There is no sign of such a turn around.
Yesterday (3) the Government decided to carry out an immediate write-off of all crop loans taken by farmers, in response to requests received from several farmer associations, according to the President’s Media Division (PMD). Also, yesterday the salary increments of public sector employees serving in State-owned Enterprises (SOEs), universities, Sri Lanka Parliament, Attorney General’s Department and the Judicial Service as per the final report of the Presidential Expert Committee, was released, with recommendations for raising public service salaries and allowances effective from 1 January, 2025. According to reports, Sri Lanka had 1.35 million state employees in 2023, and the salary bill was a staggering Rs. 939 billion rupees while the pension cost was Rs. 372 billion. Last month, when the committee was appointed and proposals were being drafted a senior government official was reported to have said that the planned salary hike would cost around Rs. 200 billion a year.
The question is where Sri Lanka will find such a sum, with the State failing to provide nearly Rs. 4 billion asked from the Suwa Seriya Ambulance Service due to budget prioritisation and lack of funds. Has the economy and state revenue really turned around that much in one year? The same state official justified the plans stating that the increase will be within the parameters of an IMF programme.
Meanwhile, the People’s Action for Free and Fair Elections (PAFFREL), has, in a letter to the Elections Commission, described that the Cabinet announcement of the decision to increase the salaries of state sector employees from next year (2025), and the proposed reduction of personal income tax, as being construed as constituting acts of undue influence of electors in connection with the free exercise of their franchise at the upcoming Presidential Poll including its postal vote. The Election Commission (EC) on their part has stated that it will take necessary measures if any decisions made by the Cabinet of Ministers these days impact the electoral process pertaining to the Presidential Election.
What is disappointing is that despite the prolonged economic crisis which Sri Lanka faced over the last two years, and the impact of the Covid-19 pandemic, our lawmakers are yet to understand the gravity of vote-bating populist policies. Sri Lanka simply cannot afford to repeat past mistakes.