The Hon. (Prof.) Anil Jayantha

¶ 01 Hon. Chairman, I was addressing the importance of this Ministry and the significance of debates at the Committee Stage of the Budget.

¶ 02 What we saw throughout the previous Committee Stage Budget debate is visible again today. Many Opposition MPs went outside the subject at hand and presented numerous irrelevant and false points. However, in conclusion, the Hon. Member who spoke from the Opposition did present several important matters relevant to my Ministry. I wish to thank him. We should in fact take those into consideration. They are issues we too have identified. I am very grateful to the Hon. Member for presenting those matters.

¶ 03 The National People’s Power coming into office is not merely a routine change of government typical of political activity, but a decisive shift of power. The methods maintained by those who governed earlier—who now sit in the Opposition—have changed because of this shift. When they governed, they often misled the public and spread many falsehoods about us as well. It took decades for us to prove to the people that those were untruths and to show who we really are. A simple example is this: there was a claim, echoed even by some clergy, that if we formed a government there would be large-scale violence and even peraheras could not be held. Some among the public may have accepted that as reality. Yet today we have been able to arrange, among other things, for the exposition of the sacred Tooth Relic with due respect, particularly for the Buddhist public. We regard this as a result of the request made by our Hon. President to the Venerable Maha Nayakes. It goes beyond a matter of religion alone.

¶ 04 To achieve the transformation we spoke of, everyone must come together. This is not something limited to a Budget speech or a political speech in Parliament. We must move to a place where society, culture and religion are all integrated. Now we are in government. The Opposition cannot go on as earlier for years telling lies; that cannot be done now. Therefore, issues such as salaries, the 15 percent tax, and the petroleum blocks were very quickly revealed to the public. We too are revealing and explaining them. We have never—then, now, or tomorrow—told lies. We stand for the truth. Because we speak the truth, falsehoods are being exposed rapidly.

¶ 05 Next, I must respond to some questions raised by the Opposition. They asked about jobs. They said we promised not only to increase salaries but also to provide employment. Yes, that promise is being fulfilled. A special officials’ committee appointed by the Cabinet has studied this and given us a report on how recruitments will be made. For those recruitments, Rs. 10 billion has been allocated for this year. According to that report, in the first phase, we have identified 15,453 vacancies. Under nine Ministries—including the Ministry of Public Administration, Provincial Councils and Local Government; the Ministry of Defence; and the Ministry of Science and Technology—Cabinet approval has already been granted to recruit 7,456 persons. In addition, the officials’ committee has recommended and submitted for Cabinet approval a further 2,003 posts. Among these are a large number of posts in island-wide executive services, management services, public health services, pharmacists, radiographers, health clerks, hospital attendants, and so forth. There are also posts in areas such as the Supreme Court judiciary, court officials, and prison officers across several sectors.

¶ 06 When it comes to recruitment to the State sector, our past experience is of hirings with or without examinations, or on the basis of political patronage. Because of such recruitments, problems have accumulated in the public service. We are changing that, and instead of such practices we will recruit the required groups in a more systematic, rules-based manner. The necessary provisions have been allocated.

¶ 07 In our country, the teacher–student ratio is actually close to global norms. Internationally, a ratio around 1:17 is considered standard. We are around or even above that level. However, there are shortages in particular areas—especially for STEM (science, technology, engineering and mathematics) and in remote regions—where we have fewer teachers. Understanding this situation, I state that within this year we will recruit a considerable number, according to identified vacancies, to address these gaps.

¶ 08 There were many myths and false ideas presented about the salary increases. To put it simply, the basic salary at every grade and scale will increase by between 60 and 80 percent. To my knowledge, such an increase has not occurred at any time in our history. Several key reasons underpinned this decision. In the past, salary increases tended to result from bargaining and negotiations—through strikes and industrial action. But when we assumed office, we based this increase on decisive economic and scientific factors.

¶ 09 First, over the last two to three years inflation rose rapidly, by around 70 percent. When inflation rises, people’s purchasing power falls; real wages decline. We cannot just watch that happen. In the medium term, that is not good for the country as a whole. When purchasing power falls, national production and aggregate demand also decline, and the economy can contract. We inherited a shrunken economy. Our responsibility is to stabilize and expand it. As we carry out other tasks of expansion, the Labour Ministry—my Ministry—plays a central role because labour gives life to the value of all goods and services produced. What we have provided is not the ultimate wage increase for labour; under current price levels, a proper living wage—what we call a living wage—should exceed one hundred thousand rupees. Even if we could not bring the basic salary to that point immediately, we have been able to grant a very substantial increase. We are prepared to consider further actions going forward.

¶ 10 As the Hon. Member mentioned, we must pay special attention to matters such as allowances in the private sector and practices like insurance. Some matters must be discussed; certain allowances have been given but issues remain regarding the basic salary.

¶ 11 As for vehicle permits, we will consider this in the future and see how to approach it in a better way.

¶ 12 Next, I wish to focus on how, under the Labour Ministry, we will establish a new, productive, and dignified labour framework in Sri Lanka. Traditionally, we have thought in terms of simple employer–employee relations: raw materials, some equipment, a worker and an employer sufficed when markets were not so expansive. Today, however, the world is characterized not just by employer–employee relations, but by production relations. Even a simple product is connected to a global supply chain. Therefore, we consider how to make the production process more efficient by bringing in technology. We also need broader mechanisms to involve people in the production process, to share information fairly, and to deepen democracy within production processes. We stand for a more productive relationship conducive to industrial peace. We are working toward that.

¶ 13 A major issue here is the Employment Statute, which has been halted midway. We intend to revise it. There are several reasons: the current draft contains many issues and did not engage stakeholders adequately—only a small number were consulted. Therefore, we have prepared to convene wide consultations involving workers, employers, and experts. The primary focus now is to move beyond narrow bargaining between isolated parties under orders or regulations, and to address how, within production relations, we raise the productivity of goods manufactured in the country. Everyone’s responsibilities must be considered. Our experience of traditional trade union disputes shows that unions always stand for their demands while employers say they cannot grant them, creating conflict. In bargaining, the side with social and financial power tends to win, which ultimately entrenches ownership patterns rather than yielding good outcomes. Instead of generating conflict and then bargaining agreements within a conflict-ridden society, we aim to build relations that minimize conflict and foster industrial peace, while ensuring workers’ rights, wages and benefits, and discussing their responsibilities and accountability within the production mechanism. Rather than keeping the worker outside and the employer on one side and bringing in a third party to run production—thus creating conflict—we want a more democratic process in which workers and all parties participate in decision-making during production.

¶ 14 We are also discussing international conventions—especially those of the ILO. Within production relations, child labour remains a serious problem. We all oppose employing children; we see it as a crime. Yet child labour still occurs, as do workplace violence and unsafe conditions. Who is connected to these? We are. So while we speak on the surface, these issues persist in society. By enacting this law, we aim to bring solutions to matters like child labour and issues in women’s labour.

¶ 15 As at today, what is the condition of our labour force? Out of a population exceeding 22 million, our labour force is around 8.4 million. According to the Department of Census and Statistics’ end-2023 survey, labour force participation is about 38 percent—under 40 percent. With updated figures, it may be even lower today. Compared with Asian countries, we are far behind—others are at 60, 70, even around 77 percent. This shows that for various reasons our labour is not being effectively deployed in production. There is a market failure here; participation below 50 percent is too low.

¶ 16 If we look at the capacities of our people, I believe everyone will accept that if opportunities are provided—if doors are opened—our people, with their skills and talents, can work hand-in-hand with any workforce in the world. We can nurture such people. Therefore, we have a key need and desire to increase participation. Women’s labour is especially important. Unfortunately, female labour force participation is around 30 percent. We must change that. There are many barriers—some identified by research—including cultural and social factors, and structural issues. Taking these into account, our policies address unpaid care work and the care economy, with the aim of integrating productive women’s labour into production safely and with dignity. If we can raise female participation from 31 percent to 50 percent, we can add a large share to national production. This cannot be done in a year, but we will provide guidance, facilities and incentives progressively. We expect to commence 68 core activities during 2025.

¶ 17 Looking at the distribution of our labour across the economy’s three main sectors—agriculture, industry and services—although large shares of the labour force are in agriculture and industry, the income added to national production is insufficient. About 26 percent of the labour force is in agriculture, around 26 percent in industry, with the rest in services. In services, we must go for broad modernization. The more services that are linked to global supply chains and international production, the more the services sector can contribute. Activities isolated from those linkages add less. We are exploring how to pivot to such services, especially by positioning ourselves as a logistics hub targeting international trade, and expanding our comparative services profile given our geographic location. If labour is deployed productively, we believe we can rapidly raise national production in a short period.

¶ 18 Regarding the Ministry’s operations, under the Labour Ministry there are two Departments: the Department of Labour and the Department of Manpower and Employment. In addition, there are statutory bodies funded by a consolidated fund, including the Office of the Commissioner of Workmen’s Compensation. There are also autonomous institutions such as the National Institute of Labour Studies and the National Institute of Occupational Safety and Health, and the Labour Welfare Fund as a state fund. Our Government has been in office only a few months, and we must carry forward what was already in motion; we cannot abruptly halt everything and start anew, nor is that necessary. There are many effective ongoing activities. To continue them, for 2025 the allocation exceeds Rs. 6,070 million, the largest share going to the Department of Labour, which also has the largest workforce. The Labour Ministry has 3,433 employees, of whom 78 percent are under the Department of Labour. Of total Ministry expenditure, 7.1 percent is for the Ministry proper, 82.7 percent for the Department of Labour, and 10.2 percent for the Department of Manpower and Employment. Compared to 2024, the Secretariat for National Productivity and the Foreign Employment sector have moved under another Ministry and are not applicable to us. After excluding those two, last year’s allocation was Rs. 5,427 million; thus Rs. 6,070 million for 2025 is about a 12 percent increase. A significant portion is recurrent, with the rest capital.

¶ 19 Capital expenditure is very important for the Labour Ministry. I analysed capital spending from 2019 to 2024. Capital spending is state investment—asset acquisition, development, capacity building, training, etc. During COVID-19 there were understandable spending constraints, and sometimes technical reasons for low disbursements. Nevertheless, capital spending has been at a rather low level in some years; overall execution is around 50 percent. Therefore, our challenge is to execute the allocated capital funds properly going forward. We have discussed with Ministry officials and prepared plans on how we proceed. Under these plans there are several focus areas I wish to outline.