In this period of fiscal crisis, the new National People’s Power (NPP) Government has set out its policies of tightening public expenditure budgets, especially in terms of entitlements, allowances, and privileges granted to Members of Parliament (MPs), ministers, and former presidents.
President Anura Kumara Dissanayake, as an MP in 2022, criticised the privileges of new State Ministers of the Ranil Wickremesinghe Government at the time, especially amid the prevailing economic hardships faced by the general public, blaming this political culture for the country’s economic downfall.
Accordingly, the new Government at its first Cabinet meeting in September approved the appointment of a committee chaired by retired Supreme Court Judge K.T. Chitrasiri to reconsider the entitlements, allowances, and privileges granted to MPs, ministers, and former presidents.
The Cabinet decision notes that these Government officials have been granted various entitlements, allowances, and privileges such as salaries, allowances, pensions, quarters, vehicles, staff, office equipment, and security personnel, leading the Government to bear a significant cost annually from public tax to provide these benefits.
Terming this an unnecessary burden on the Treasury, it notes that the committee will submit recommendations to either minimise this huge expenditure on the present fiscal capacity or to introduce other suitable alternative methods.
Committee report pending
Meanwhile, in the run-up to the Parliamentary Elections, the President also said that ministers in the upcoming Parliament would not be provided housing in Colombo.
Further, following the Presidential Election and the dissolution of Parliament, hundreds of Government vehicles were abandoned in the capital, prompting now Trade Minister Wasantha Samarasinghe to claim that this marked evidence of the destruction and mismanagement of public assets, which the NPP Government would address.
According to PublicFinance.lk, in 2021, the Government allocated Rs. 2,590 million to maintain the offices of 30 cabinet and 40 state ministers, with the estimated annual cost per minister and state minister being Rs. 35 million and Rs. 34.8 million, respectively. In the 2024 Budget estimates, facilities to former presidents amounted to Rs. 110 million, an increase from the Rs. 59,590 estimated for 2021.
Speaking to The Sunday Morning, Ministry of Finance Department of National Budget Director General S.D.J. Nilukshan said that since the committee report with recommendations on the perks and privileges to be limited was yet to be submitted to them, it was difficult to outline the impact of any potential reductions in expenditure faced by the Treasury.
“The committee summoned us and obtained information from us, but we are yet to be informed on the things that will be stopped. Only after that final decision is taken will we be able to identify how much can be saved,” he said. .
While multiple attempts to contact Cabinet Spokesperson, Minister Dr. Nalinda Jayatissa proved futile, Presidential Secretariat Director General Legal, Senior Advocate J.M. Wijebandara said that he was unable to comment on how much the Government would save in State resources through such measures, since the matter was still under deliberation by an expert committee.
“We have only called for recommendations to take steps in this regard, which are yet to be presented. The time given to the committee is almost up so we will receive these recommendations soon. Once we get them, we will inform the media,” he said.
He pointed out that these recommendations would require various methods, since some could even require acts of Parliament. “The committee needs to identify how it should be done and we will inform the public thereafter.”
Curtailing expenditure constructively
Meanwhile, University of Colombo (UOC) Department of Economics Head and Professor in Economics Chandana Aluthge posited that the issue did not have a straightforward answer, although extravagance in State expenditure should most certainly be curtailed.
“Of course, there should undoubtedly be guidelines on how Government officials and parliamentarians use State resources. However, MPs and other Government agencies involved in decision making should have basic facilities as well.
“For example, they need to be mobile – transport should be available to them at low cost and sometimes MPs need a place to stay in Colombo because some of them are from rural areas and a majority of the public work is done in Colombo.
“As such, they should be provided proper facilities. Otherwise, although the Government may be saving on rent and other expenditure, inefficiency is also a cost and the Government ultimately may not be able to save anything,” he pointed out.
Stressing that the curtailing of extravagance should be supported, especially as it was a demand of the public, he however added: “Any government that is in power should use the minimum resources in order to provide the maximum service to the country. However, you can’t save much if these things are curtailed in an unconstructive manner.”
While advocating State support for Government officials, Prof. Aluthge pointed out that such support should be regulated and considered in a more pragmatic manner, noting that there should be a strong rationale for the curtailing of expenditure.
“If past presidents have led an extravagant life, those unnecessary expenditures should be curbed immediately. However, the decision-making process should also ensure that the president can, without any hindrance, take decisions and do the work assigned to him. There should be enough resources to finance all these activities of the presidential machinery.
“When it comes to parliamentarians, the president, the prime minister, ministers, and Government officials, there is a certain expected level of activity, so there is a cost involved. That minimum cost should be available,” he asserted.
Addressing the long-term sustainability of such measures, he said: “The utilisation of State funds in the most appropriate manner would set a benchmark for future governments on how the State should be run. The people would also be educated on how a state should behave and on how limited resources should be utilised and channelled to different types of work.
“Future governments will then have to follow these examples and benchmarks. We lacked control over these things in the past, as a result of which the whole country is struggling. If this new Government sets these standards, albeit in a more rational manner, it will be very useful for the country in the long run.”