Designer development Budget!
A confident Finance Minister Mangala Samaraweera speaks at the Daily FT-Colombo University MBA Alumni Association organised 2018 Pre-Budget Forum at Hilton Colombo. Others from left MBA Alumni Association President Irshan Jayah, Daily FT Editor Nisthar Cassim, State Minister of Finance Eran Wickramaratne and forum’s strategic partner Standard Chartered Bank Sri Lanka CEO Jim McCabe
As the days tick down for Budget 2018, Finance Minister Mangala Samaraweera yesterday pledged to present an overarching policy framework that would concentrate on greater liberalisation and reforms as well as promote entrepreneurship, expand key sectors and grow the country on the dual pillars of reconciliation and development.
Speaking at the 2018 pre-Budget forum organised by the Daily FT and the Colombo University MBA Alumni Association, with Standard Chartered Bank as the Strategic Partner, Minister Samaraweera said he was keen to engage with the private sector and quipped that he was keen to “learn their secrets.”
He also said Sri Lanka would be presented with what would likely be the world’s first “designer Budget.”
“We will certainly take into account your proposals and we welcome further engagement,” he said. “We are available 24/7.”
Samaraweera conceded that the Government’s ambitious reform proposals had been bogged down and Budget 2018 would look at fast-tracking the process, which will also consider green and blue economies as well as encourage a culture of entrepreneurship.
“We must continue to build on Sri Lanka’s reputation. We must think of how to attract investors; we must make Sri Lanka a paradise for investors. We have to improve exports and also look at how to build the social security net, which would include the sectors of education, healthcare and housing.”
Returning to a topic that is clearly close to his heart, the Finance Minister also reiterated the importance of reconciliation and building an inclusive society that would provide financial security and economic access to minorities and other marginalised communities.
“Earlier our Government said that reconciliation and development are the twin pillars on which we will build the future of this country and that is exactly what we intend to do,” he emphasised.
State Minister of Finance Eran Wickramaratne, responding to the proposals made by 20 private sector representatives, noted that tax exemptions were challenging for the Government. He pointed out that during a recent study it was found that various concessions and exemptions resulted in the loss of as much as 1.6% of GDP in public revenue, which is higher than all the Foreign Direct Investment (FDI) attracted by the country.
On real estate, he acknowledged industry concerns of statements made on the possibility of a bubble forming in the sector. But in response to an industry representative requesting that these voices be controlled, he insisted that as the Central Bank was an independent institution the Government could not dictate what it could or could not say.
“If the Central Bank is making statements then that is because they have reason to do so. We have a responsibility towards the public and we cannot let a situation like what happened in 2008 and 2009 or in Malaysia happen again and then later yell at institutions for not letting their message be known. I, as a part of the Government, may also not like some of the things that are said but I need to say that in defence of the statement made,” he stressed.
Tourism remains a favoured sector, Wickramaratne assured, noting that the country continues to be dependent on its revenue but said debates on Airbnb and other booking platforms need to be held within the industry and once a consensus was reached it should tell the Government what steps to take. The Government would look to “creatively tax” booking platforms. He also directed several industries to present their proposals to the ministry for further consideration.