The Hon. Ravi Karunanayake

¶ 01 Thank you, Hon. Presiding Member.

¶ 02 First, my thanks to our tri-forces, police, and all involved in emergency work. Our war heroes safeguard stability and unity, and in disasters their service is invaluable. In 2003, 2015 and 2016 we granted them special allowances—I urge the Government not to abolish concessions to military families, as reported in The Island of 11 November, and to correct that.

¶ 03 On the Budget: with total expenditure at Rs. 8,980 billion and revenue Rs. 5,355 billion, the gross financing need is about Rs. 3,740 billion, of which Rs. 1,740 billion is new borrowing next year. Even as we discuss the disaster, we must address the Budget.

¶ 04 The Central Bank now functions under the Public Debt Management Act within the Finance Ministry framework. Interest costs matter: with an average interest rate around 9.8%, each one‑percentage‑point increase adds about Rs. 170 billion to costs. Coordination with the Central Bank must be formalized with clear SOPs. Debt issuance has risen (from ~14% to ~22% of GDP since April 2025). Artificial credit creation—leasing up by Rs. 1.3 trillion; overdrafts by Rs. 354 billion; credit cards by Rs. 310 billion—suggests borrowing not aligned to productive needs.

¶ 05 In 2015–2017 we introduced the National Natural Disaster Insurance Scheme—the first among 222 countries at the time—with a premium of Rs. 330 million yielding Rs. 5,500 million in payouts in 2016; in 2017 we paid Rs. 800 million in premium and received Rs. 6,800 million. It has since lapsed. I tabled documents from Mr. Ananda Silar (then at my Ministry), Strategic Insurance Brokers (Chairman Indrajith Fernando), and Mr. Manjula de Silva (then National Insurance Trust Fund) showing how this saved the country substantial sums. I urge depoliticizing and reviving such instruments.

¶ 06 I also urge suspending parate action in light of the crisis and granting grace periods on bank interest to affected businesses. The Inland Revenue has extended some deadlines, but many cannot even access offices; extend tax payment timelines to the end of December.

¶ 07 Public service productivity is an issue: of 1.6 million state employees, perhaps 0.7–0.8 million work effectively. Fear of inquiries (AR/FR, CID, CIABOC, media, COPE/COPA) discourages decision‑making. We must empower Chief Accounting Officers to deliver Budget targets.

¶ 08 We’ve asked six questions on Central Bank independence; answers are pending. Who authorized declaring a debt standstill without Parliament? That decision hurt market access and ratings. Transparency is essential.

¶ 09 Pensions cost Rs. 510 billion this year out of about Rs. 1,300 billion in salaries and pensions, projected to rise to Rs. 1,100 billion within ten years—unsustainable without a funded pension scheme. With 70% of debt service being interest and constrained capital outlays, how do we fund health, education and development if pensions escalate?

¶ 10 The IMF programme runs until 31 December 2026. What then? In about 370 days from now (to 2027), can we move beyond the IMF framework to a growth path? We need 7–9% growth, implying investment of around 35–45% of GDP, yet we are at ~15–18%. From 2028, annual debt service near USD 6.5 billion (about 35% external) demands export‑led growth. Tax revenue has risen but the tax base has not; tax files numbered about 1.2 million in 2015–16, but have since fallen. Explore new bases like crypto economy taxation. Rationalize imports to preserve FX: for example, allow palm oil imports with proper policy to save USD 300–350 million annually, rather than banning and losing FX, while restoring domestic value chains like floriculture.

¶ 11 SriLankan Airlines has accumulated losses of Rs. 684 billion yet plans a Rs. 600 million bonus—I table the 13.11.2025 document. Halt non‑essential luxury vehicle imports—stopping 1,775 cabs could free Rs. 42 billion for disaster relief.

¶ 12 In 1947 we were comparable to Japan in per capita income (USD 48 vs 498 then); today Japan is USD 4.1 trillion to our USD 98 billion. Vietnam is USD 476 billion, Singapore USD 575 billion. We need radical economic growth and to protect the rupee; depreciation alone adds about Rs. 40 billion to Budget losses when vehicle imports are opened without safeguards.

¶ 13 Thank you.