The Hon. (Dr.) Harsha de Silva

¶ 01 No problem, Hon. Speaker. Let us begin from the start; please allow my full time from the beginning.

¶ 02 Appropriation Bill, 2026

¶ 03 Order read for resuming Adjourned Debate on Question — [07 November]: “That the Bill be now read a Second time.” — [The Hon. Anura Kumara Dissanayake] Question again proposed.

¶ 04 Hon. Speaker, yesterday the President said he is not a constitutional autocrat and asked what we fear. He said there is no need to join with other Opposition groups, and protests are unnecessary. Yet when he clashes with the Opposition, it becomes clear that there is no expectation of elections in 2026. But, Mr. President, do not forget you have only about 43 per cent. We know a large anti-democratic programme is being run to try to get state power of 65 for the JVP-NPP by changing the multi-party system, seeking one-party rule through village societies, GS committees and even the police. Therefore, for democracy and the multi-party system, protests by Opposition parties, inside and outside Parliament, will happen when necessary.

¶ 05 On the Budget, I wish to present a reasoned, data-based critique. We accept that the Government has stabilized the macroeconomy — that is good. But we challenge that you have not presented the next step — a plan for growth.

¶ 06 We appreciate the anti-corruption framework. People expected thieves to be caught, and laws passed in 2024 and a strengthened CIABOC should apply fairly. But this cannot be a political witch-hunt. On the sugar deal — nothing happened. On the E-visa deal, the Auditor-General reports US$ 1.8 million collected over three and a half months and taxes like VAT and SSCL not paid; the MoF had advised against an unsolicited bid, yet it went ahead. What of the 323 containers report? Was it placed before the House? No. Instead, implicated officials reportedly got promotions.

¶ 07 Now the double-cab procurement: 1,775 units with truncated tender periods and narrow eligibility — suspend and investigate. Do not “shape” it by giving cabs even to the Opposition.

¶ 08 Concerns were raised about a large Union Place People’s Bank building project. A director who flagged alleged fraud was removed — if there is wrongdoing, act regardless of which party is in power.

¶ 09 On Proceeds of Crime, a Minister said Sri Lanka has Rs. 8 trillion in debt but only Rs. 2 trillion in assets, implying Rs. 6 trillion was “stolen.” That conflates institutional asset locations with MoF liabilities; we must be responsible in public statements.

¶ 10 Stabilization: from 2022-23 collapse to 2024 stability — inflation fell from 70 per cent to negative, policy rates from 35 to 8 per cent, the dollar from Rs. 370 to Rs. 294. But now the rupee is back near Rs. 307. SOEs turned around due to IMF-backed reforms: CEB from a Rs. 298 billion loss (2022) to Rs. 144 billion profit (2024); CPC from a Rs. 617 billion loss (2022) to Rs. 33 billion profit (2024). We supported IMF reforms on a revenue-based consolidation, cost-reflective pricing, and key legislation: Public Financial Management Act, Public Debt Management Act, the new Central Bank Act. Domestic and external debt restructuring proceeded under the prior Government; macro-linked bonds stayed intact.

¶ 11 A windfall emerged from unanticipated vehicle imports and LCs — about US$ 1.4 billion in vehicles and US$ 1.9 billion in LCs — yielding large revenues, creating a Treasury cash surplus at People’s Bank and BoC. With that, the President could have reduced some taxes to ease cost of living. Instead, VAT exemptions promised before elections were not delivered; the VAT threshold was lowered from Rs. 5 million/month to Rs. 3.6 million/month, dragging small businesses into VAT and raising consumer prices.

¶ 12 No meaningful tax relief in 2026; instead, a property tax from 2027, with 2026 used for cadastral work and valuation. The Government has agreed with the IMF on this, though it was not clearly stated yesterday.

¶ 13 Unseen poverty in the middle class persists — as Prof. Sirimal Abeyratne said — with jobs and assets but silent financial distress. The Budget does not materially improve their condition.

¶ 14 Promises to youth: - Immediate jobs for unemployed graduates (20,000 teachers; 3,000 STEM; 9,000 IT; recruitments to IRD, Customs, Foreign Service, tourism). Yesterday’s speech gave no timelines; instead, asked protesters to disperse. - PAYE relief: raising the threshold from Rs. 100,000 to Rs. 200,000 per month was promised; not delivered, despite fiscal space from cash surpluses. - SME distress: with parate law pressures and repossessions, the promised “new relief bank” has not materialized. - Plantation daily wage increase to Rs. 1,550 requires about Rs. 8 billion more; allocated only Rs. 5 billion, which is insufficient. - Concessional, collateral-free vs interest-subsidized credit: you spoke of collateral-free lending (via NCGI), but not of interest-subsidized loans you promised. - Freelancers taxed: their tax raised from 0 to 15 per cent in 2025; no relief or promised online job bank delivered; the “We for the Renaissance (V4R)” digital platform not delivered. - Trade and competition: wholesale market hubs (25) not established; rice mafia not curtailed; promised tabling of stock release documents did not happen. Cold chain and Dambulla “Prabhashwara” complex remain incomplete, though now promised within the year.

¶ 15 FDI: The claimed US$ 823 million in 2025 is below 2015–2018 levels. Much of 2025 FDI reflects earlier agreements: Adani port (2018), Melco casino (2024), Indian apartment projects, Michelin-CEAT share restructuring. Genuine new momentum remains limited.

¶ 16 Exporters: Withdrawal of SVAT without a functioning 45-day refund and without the promised parallel run harms cash flow, especially SMEs. Deloitte webinar feedback and JAAF concerns highlight this risk. On trade policy, last year’s talk of RCEP vanished; ETCA/CEPA remain stalled despite 14 prior rounds. There is no political will to liberalize services and integrate regionally.

¶ 17 Vehicles: You promised affordable Vitz cars and Japanese motorcycles; instead, added SSCL at import with an unclear refund mechanism. Sri Lanka still has the world’s second highest vehicle taxes; no relief provided.

¶ 18 Housing: You promised finance for young couples and urban housing with land support and title solutions (“Urumaya”). For 2026, Rs. 10.2 billion is allocated for 10,000 houses — about Rs. 1 million per house, which is unrealistic given current construction costs. Premium urban projects cited are from 2018–2019 plans; Rs. 15 billion now is insufficient.

¶ 19 A better measure is the civil-service housing loan interest support: up to Rs. 3 million with a 4 per cent subsidy when market is 10 per cent — Rs. 120,000 per year per loan. But only Rs. 500 million is allocated — roughly 4,000 loans — negligible for 1.4 million public servants. Realistic loan sizes at typical incomes would only fund Rs. 2.3–2.8 million, far below needed amounts for decent homes, especially with high construction input taxes (Cess, PAL) on cement, asbestos, wall tiles, bathroom fittings, concrete, PVC, insulation, etc. If you truly want housing, reduce these para-tariffs.

¶ 20 Elder care and pensions: You promised a universal contributory pension mechanism and wider health/life insurance across private-sector workers. Yet you indicated rescinding recruitment-related gazettes and gave no pathway to contributory reforms. Wage and pension bills are rising steeply. The senior citizens’ additional fixed deposit interest was reduced from 5 per cent to 3 per cent and is reportedly set to end by year-end under the IMF programme — clarify this.

¶ 21 Health: You promised to raise health spending to 3 per cent of GDP soon. Some base allocations to primary medical care and health centres are welcome. Annual free health check-ups for all over 40 were announced, but with no clear budget lines. Rs. 10,000 support for chronic patients appears limited to thalassaemia with only Rs. 250 million allocated. Essential medicines supply remains fragile. Online appointment systems for state hospitals could be implemented at low cost; yet not initiated.

¶ 22 Education: Reforms require investment, not just presentations. Parents everywhere want English education; many sacrifice to pay for international/private schooling. The gap between youthful aspirations and delivered outcomes is stark.

¶ 23 In conclusion, to eliminate poverty, create jobs, and reach high-income status by 2048, we need sustained real growth of about 9 per cent from 2026. While stabilization is acknowledged, this Budget lacks a coherent growth path and shows ideological confusion between liberal trade and statist control. Mixed signals on tariffs and para-tariffs illustrate this. Talk is cheap; delivery is what matters.

¶ 24 Thank you.