BY RAJPAL ABEYNAYAKE
The President knows that tax cuts have have led to lost revenue, but he considers that an investment, and his new tax regime would be in force for the five years of his tenure. So said the president’s secretary Dr. P.B. Jayasundera, according to news reports. This clear indication about fiscal policy came in the same week that Dr. Jayasundera announced that all palm oil imports would be stopped.
Oil palm cultivation will be halted in a phased out program. The tax cuts and the palm oil policy are just two of the progressive policy measures that reversed the right-wing UNP years of pandering to the advice of external elements, and put a stop to the crass and unguarded importation of anything and everything, again pandering to the diktat of external capital.
The policy of the tax cuts goes in tandem with the slashing of interest rates, and it’s a sustained fiscal measure that goes against the UNP paradigm of ‘balanced budgets’, and forcing an unbearable tax burden on the people aimed towards achieving that end. Meanwhile, the importation of any muck ends. This island is not a dumping ground for goods that are meant to stifle local industry and local produce.
A Minister who was much maligned recently, had said that he has a goal of replanting some thousands of acres of coconut. These are progressive policies, that would have to run the gauntlet of ridicule, protest and outright sabotage. But they are progressive policies. As far as taxation policy goes, it seems the Opposition is trying to make the people forget what they got by way of tax relief after this government came to power. The unfair tax burden was lifted, and that was relief from a tax regime which targeted the piggy bank savings of kids.
The right-wing UNP’s dumping policy, remember, extended to raw garbage. There was a real initiative taken by a certain branch of that government to encourage various Western nations to ship their un-disposable garbage here. That was the level to which we’d sunk as a right-wing lackey of certain powers whom we were eager to please.
The policy correction that took place subsequent to that with the advent of the Gotabaya Rajapaksa regime has reversed years of dumping, and years of taxation policy based on misguided models enforced from abroad. The impact cannot be underestimated. Unburdened from the tax stranglehold, there is a genuine chance for business to spring back into action after enforced atrophy.
This even goes for the conglomerates that were hit with so called super taxes. The reversal initiated by this government is progressive policy, but it’s not growth retarding as the policies of the Bandaranaike era of the 70s was. The policies of today are progressive in this writer’s opinion, because they are based on a correct understanding of capitalism. They are not ‘progressive’ based on a socialistic vision of utopia. The policies of the UNP were to offer ourselves to the highest bidder. The UNP allowed anything. The UNP asked the shipping companies to compete with foreign concerns that were allowed to operate here with complete laissez-faire. There were no restricted goods and that policy of laissez fair meant that local industry had no chance against dumping.
Contrasted to that, when locals tried to export to the West, they were subject to protectionism through legitimate sounding means. They had to adhere to scrupulous standards that had to be met from every quality control metric imaginable. But the usually foreign advisors of the then government wanted no protectionism whatsoever in Sri Lanka, so open season was declared on our industries.
Brought back were the policies that weaned our people away from local products, as was stated in last week’s column in this space, with regard to the long term policies that through disinformation made our people spurn coconut oil. That may not have been an initiative that was introduced by the last government — but it was a racket introduced by several UNP governments before it. The last
The UNP government followed the same playbook, with different commodities. The paddy cultivator was basically told that there was no use of his produce because paddy fields were anyway going to be converted into lands that housed industry!
We became such a dumping ground that cars were grounded for days on end, because the wrong grade of fuel was being imported. The UNP now points to coconut oil contamination forgetting the fact that there is vigilance these days, and no importers can get away with dumping and other unscrupulous market practices. The dumping during their time was so comprehensive that we became an enslaved people. We were the international lab rats, that’s all. Remember the google loon fiasco? Whenever various adventurous elements wanted to experiment, they chose us as the guinea pigs.
Progressive policy has now replaced this national sellout. That led to a whole slew of folk who were getting rich from these policies, losing their status as collaborators. Remember that Arjuna Mahendran was foisted on us during that era.
That was emblematic, and was just the surface veneer of a problem that ran much deeper. The entire hit job on our economy was such a success that the hit men had a field day seeing a country pillaged as it had never happened before.
In this context, the changes being made now are monumental. As a nation, we came to the brink, and were rescued at the time we were hanging off the cliff-edge.
But if we ever go back to having a right-wing dispensation again, we may not be so lucky. Parties such as the SJB, which pretend to have learned from the UNP’s misrule, will follow the same right-wing playbook if they are ever elected to power.
So what’s incumbent upon this government is to ensure that there is continuity because we may not survive one more calamity of the kind we suffered from 2015 upto late 2019.
If real progressive policy gets undone and the tax regime go back to what it was because certain puppeteers want it that way, it would be the last straw, and this time we may never recover from one more right-wing onslaught.
The progressive gains that have been made cannot be undermined with falsehoods, with those such as Mangala Samaraweera trying to cast themselves — wait till you hear this — as patriots.
The ease of doing business, is at least something that’s now being looked into on a daily basis. During the time of the UNP, their tax regime and their regulatory straight-jacket made it harder for people to do business — and that was deliberate, because if business thrived in this country, there would have been no market for the muck they dumped here on us.
So, the number one priority of the government should be that there is a lock on the progressive policy they have initiated. The people do remember the nightmare they went through — especially, the salt of the earth, the cultivator, and those who turned out local produce for a living, be it in SMEs or in the rural farmland, or in small time startups.
However, there are elements that the right-wing targets for their propaganda, and they feel that they can have pandemic induced conditions undermining the progress that has been made. The progressives therefore have to build themselves up as a Movement, not just a political party or a loose coalition of political groups they currently form.
If we reverse progressive policy now, we run the risk of becoming a permanent client state. We were a client state for five years from 2015, and had been during the tenure of several right-wing regimes before that.
But they never succeeded in totally ransacking us. Not the colonisers, though they came very close, and not the neo-colonisers who came extremely close. It’s incumbent upon this government to ensure continuity — not just continuity of policy in the five years of the regime — but long term continuity, so that we don’t become the victims of pillage one more time — and perhaps this time, irreversibly.