Legislation to establish the Parliament Budget Office will be introduced shortly, a highly placed government source told the Sunday Observer. Once the legislation is in place, parliament will appoint members to the Board and the members would represent academia, think tanks, consulting firms and external experts to provide authoritative budget analysis. The Speaker will appoint the head of the committee and they will report to the Public Finance Committee.
This initiative, a first in Sri Lanka, comes in the wake of the government’s decision to introduce oversight committees into parliament and to strengthen public finance. The committee on public finance has already been introduced. The Bill to establish a separate parliamentary budgetary office is being drafted. “The office will handle independent analysis of fiscal policy and the budget, which is a crucial mechanism to run the monetary policy of the country,” one of our sources said. The legislation is expected to be operational in time to monitor the 2018 budget later this year.
“It is parliament which controls public finance. Unfortunately in Sri Lanka practice has been it is the Treasury that controls it and they try to dictate to parliament which is an impractical way of handling finances,” according to the same source.
A financial analyst said the handling of finances by the Treasury can be very risky as there can be instances where the officials could be manipulated by the political leaders, as has happened on several previous occasions. Sri Lanka is already experiencing some of the negative effects of bad handling of finances - and the worst period was during the regime of former President Mahinda Rajapaksa – where they did not inform parliament about the country’s debts. And they got the Treasury to conveniently manage commercial debt,” the analyst said.
“They took on a large amount of liabilities. Therefore, the country’s debt servicing repayment now is Rs. 5.6 trillion.”