Wednesday, December 9, 2015
The CLASSIC POLITICAL CON in the Budget!
The Revenue Projections and Capital Expenditure projections are NOW seen to be both figments of a good imagination of either the Finance Minister or Treasury Officials is now not a State Secret. IS ACCEPTED FACT.
So what gives? In the scheme of things it is clear as daylight that these mirages and statements are merely political and don’t have any credibility in reality. It is done to fool the people that money will be spent.
For example the Education Budget has more than doubled to Rs 200B, mainly due to capital expenditure and some ambitious plans. The problem is that even in 2015, the Education Ministry failed to spend the money allocated to it this year. If they are incapable of spending the money given to them now, how on earth will they be able to double this spend next year?
They cannot, and just like that the Revenue projections of 39% increase in Govt. revenue in one year from the previous, is theoretically impossible! Therefore it is just a figure as the balancing figure, one the proposed Deficit is calculated!
I hope therefore that whilst it is politically popular to say that the Govt. is on target to spend so much more on education, it does not matter to the Govt. that they will not be able to spend even the amount allocated to this year, let alone a higher amount nest year.
So while the pundits talk about the deficit ballooning to stratospheric levels, it is all another smoke and mirrors job to fool the public, that the budget has increased expenditure in say, Health and Education, critical areas for much needed heavy capital expenditure. The reality then is that the Revenue shortfall of 400B will matched by a capital expenditure shortfall of the same, with the ability then to keep the magic numbers for the deficit unchanged.
It is time the IMF to whom Sri Lanka will inevitably go, cap in hand for a bailout, and emergency line of credit, realize this game that is played. Of course the consequences of this Govt. play acting is that there is NOT sufficient capital investment to ensure growth in the future, and at least at the required levels to reach the goals of GNP per capita that the Govt. has set itself.
We have to rethink the budgeting process from zero, and re educate our Public Officials in the art of spending public money wisely, and prioritizing the individual Ministry allocations, for the public good, and not merely for their ease of life of leisure that seems to be how public money is disbursed.