The Hon. (Dr.) Harsha de Silva

¶ 01 Hon. Presiding Member, I have very little time as I just arrived from the Committee on Public Finance.

¶ 02 Before speaking on the scheduled matters, I must refer to the audit report tabled. Its executive summary raises many issues regarding the institution that purchased coal: it appears they are not registered, and questions are raised about their capacity to supply quality coal. Is that not so, Hon. Minister? I only glanced at the executive summary for two minutes. If I am wrong, someone can say so.

¶ 03 I raise this because in 2022 we faced a similar issue. As Chair of the Committee on Public Finance then, I was tasked to investigate. We reported to Parliament that minimum qualifications set for suppliers must not be bypassed. If I recall, only entities that had supplied one million metric tonnes within a certain period could qualify. We recommended, with my signature, that officials involved in that decision should not sit on any tender committee for 12 months. The then Government had an issue with me over that. Now, this report suggests a similar mistake has happened again, causing a massive loss. Who will pay? Even if some amount is recovered, what of the balance? The additional diesel-based power generation costs—who pays? Ultimately, the people.

¶ 04 This is why taxes on people’s backs are imposed—to raise money. No money falls from trees.

¶ 05 Yesterday our team argued that while the Social Security Contribution Levy (SSCL) is 2.5 per cent nominally, as a cascading tax—unlike VAT which is value-added—the effective burden is higher.

¶ 06 If we agree with the IMF that tariffs should reflect costs, then when costs rise, electricity bills rise. To reduce bills, we must reduce costs. That is why the Sri Lanka Electricity (Amendment) Act was brought last year to enable private sector participation in generation, transmission, and distribution, while keeping 100 per cent state ownership. But with 100 per cent state control blocking flexibility, costs remain high and must be borne by the people. The IMF says subsidies cannot be granted arbitrarily; revenue must be collected. Therefore, we insisted that targeted relief must be provided to the poor.

¶ 07 The President has given targeted relief today; that is fine. But by my calculation, it costs perhaps Rs. 80–90 billion. From where will it be funded? If not by new money, then which heads will be reclassified or cut? We need clarity. The cash buffer, once around Rs. 800 billion, has reduced, increasing tightness. Recently, weekly Treasury bill auctions were undersubscribed; yields tend to rise. Therefore, we need to know which expenditures will be reduced to fund this relief. Also, Aswesuma increases are only for April—about Rs. 8.5 billion. Will prices fall within a month? How?

¶ 08 Similarly, electricity bill relief and fuel relief are only for about three months. Can the Government guarantee that within three months inflationary pressures will ease significantly? Economic theory tells us prices are sticky downwards; they rise quickly but fall slowly. While we accept targeted relief, we need an analysis of the financing.

¶ 09 Thank you.