B
y Maheesha Mudugamuwa
The drought experienced around the country is seriously impacting the economy and in turn, the cost of living continues to rise.
Tens of thousands of state, private, and estate sector workers are demanding an immediate increase in their salaries, in line with the rising prices of daily essentials and services.
The Government said it would ensure a salary hike for public sector workers in the new budget once it is presented to Parliament for approval.
“It has been two months, but we are still waiting for the salary anomalies to be sorted,” Sri Lanka Government Officers’ Trade Union Association (SLGOTUA) National Organiser B.A.P. Basnayake told The Sunday Morning.
In addition to the resolution of salary anomalies, trade unions are demanding an overall increase of the cost of living allowance due to the increased prices of daily essentials.
“The minimum salary inclusive of all allowances received by a state employee is not sufficient to feed a family of four. A majority of state employees are debtors. There are employees who receive Rs. 500 in allowances per month after the loan and other deductions,” Basnayake stressed.
“More than one million state sector employees are on a salary scale of Rs. 30,000-50,000,” he said, adding that even if the Government increases salaries at the usual rate, i.e. annual increments, that would not be enough, as prices of all essential items had increased dramatically.
“Since the Government is also struggling economically at present, we have decided to wait before we launch any trade union action. But next month, we will take a decision on future action,” he said.
He also noted that the promises made by President Gotabaya Rajapaksa were yet to be fulfilled.
“President Rajapaksa promised to bring back the government pension scheme which was cancelled in 2016. But so far, none of the responsible authorities talked about it,” he stressed.
The expectations of increased salaries have been mounting for several months in every sector of the country, but the increased prices of vegetables, rice, and other essentials have aggravated the situation.
At present, as claimed by experts, the economic situation of the country is not favourable and so, would not be able to bear a sudden increase in the salaries of all its employees.
However, as per statistics given by the Central Bank of Sri Lanka (CBSL), headline inflation, as measured by the year-on-year (YoY) change in the Colombo Consumer Price Index (CCPI, 2013=100), increased to 5.4% in January 2020 from 4.8% in December 2019 due to monthly increases in prices of items in both the food and non-food categories.
In addition, food inflation (YoY) has also increased substantially to a 25-month high of 11.7% in January 2020 from 6.3% in December 2019, while non-food inflation (YoY) stood at 2.9%.
Low-earners vulnerable
Meanwhile, speaking to The Sunday Morning, CBSL Monetary Policy Consultative Committee Chairman Prof. Sirimal Abeyratne said Sri Lanka’s economy was still controlled by weather conditions.
“When the economy moves into ‘advanced’ status, that impact has to be lower or be minimised. But unfortunately, the Sri Lankan economy still gets affected by drought and rain conditions. That’s why we have fluctuations in our cost of living,” he added.
Commenting on the salaries, Prof. Abeyratne said: “Salaries should increase not because of any decision by the Government or commissions, but according to the level of development and productivity improvement. That’s the sustainable way of increasing the income. If the salaries are not enough and if there are anomalies, those things can be corrected temporarily and on a short-term basis, but long-term improvements should come from development and productivity.”
As explained by Prof. Abeyratne, even though Sri Lanka categorised itself as a middle-income country, moderate poverty was still high.
“We say we are a middle-income country, but according to World Bank calculations, two million people are earning less than Rs. 575 per day and we have eight million people earning less than Rs. 1,000 per day.
“We calculate the percentage of poor as 4%, i.e. according to our national poverty line where earnings are less than Rs. 5,000 per month. This is the ‘survival expenditure level’ for a person. So we have 4% of the population who don’t even earn a survival-level salary,” he stressed.
“And if we look at moderate poverty, we have eight million people earning less than Rs. 1,000 per day. That’s really troubling as far as our development status is concerned. Whenever food prices increase, these segments are highly vulnerable,” he added.
Reduced consumer taxes, increased PAL
Speaking to The Sunday Morning, Janatha Vimukthi Peramuna (JVP) politburo member Wasantha Samarasinghe stressed that the people of the country were suffering under the burden of a high cost of living, pointing out that even though the Government reduced taxes recently, they took steps to increase the Port and Airport Development Levy (PAL), which in turn caused increases in the prices of imported goods.
He added that if this did not change, the people will continue to be burdened.
The Consumer Price Index (CPI) has not changed for the last seven years – it is supposed to be changed every five years. The prices of essential goods have increased, but the salaries have not increased in parallel. “Therefore, we urge the Government to review and increase all public, private, and estate sector salaries to match the cost of living,” Samarasinghe said.
He went on to say that even though the daily wage of the estate sector workers had been increased by the Government, the workers were not yet getting paid the higher amount.
Speaking to The Sunday Morning, Government Spokesman Keheliya Rambukwella noted that the salaries of workers in all sectors would be revised by the new Government through the new budget.
“During the past period of the Rajapaksa administration, we had been making additions to the salaries considering the Cost of Living Index (CLI), and we will continue that. From 2007, irrespective of the war, we had been paying a considerable amount.
“But what happened was the last Government agreed to pay Rs. 10,000, but scattered. Over the period of five years, we started paying Rs. 2,500,” he added.
“In accordance with the CLI, there will be certain increments. But you need to have a new Government and budget. Now, we have a Vote on Account and the Government can’t add additional expenses and can only have recurrent expenditure. We will definitely take the issue of salary increments under serious consideration. This could become a reality with the new Government and a new budget,” Rambukwella stressed.
y Maheesha Mudugamuwa
The drought experienced around the country is seriously impacting the economy and in turn, the cost of living continues to rise.
Tens of thousands of state, private, and estate sector workers are demanding an immediate increase in their salaries, in line with the rising prices of daily essentials and services.
The Government said it would ensure a salary hike for public sector workers in the new budget once it is presented to Parliament for approval.
“It has been two months, but we are still waiting for the salary anomalies to be sorted,” Sri Lanka Government Officers’ Trade Union Association (SLGOTUA) National Organiser B.A.P. Basnayake told The Sunday Morning.
In addition to the resolution of salary anomalies, trade unions are demanding an overall increase of the cost of living allowance due to the increased prices of daily essentials.
“The minimum salary inclusive of all allowances received by a state employee is not sufficient to feed a family of four. A majority of state employees are debtors. There are employees who receive Rs. 500 in allowances per month after the loan and other deductions,” Basnayake stressed.
“More than one million state sector employees are on a salary scale of Rs. 30,000-50,000,” he said, adding that even if the Government increases salaries at the usual rate, i.e. annual increments, that would not be enough, as prices of all essential items had increased dramatically.
“Since the Government is also struggling economically at present, we have decided to wait before we launch any trade union action. But next month, we will take a decision on future action,” he said.
He also noted that the promises made by President Gotabaya Rajapaksa were yet to be fulfilled.
“President Rajapaksa promised to bring back the government pension scheme which was cancelled in 2016. But so far, none of the responsible authorities talked about it,” he stressed.
The expectations of increased salaries have been mounting for several months in every sector of the country, but the increased prices of vegetables, rice, and other essentials have aggravated the situation.
At present, as claimed by experts, the economic situation of the country is not favourable and so, would not be able to bear a sudden increase in the salaries of all its employees.
However, as per statistics given by the Central Bank of Sri Lanka (CBSL), headline inflation, as measured by the year-on-year (YoY) change in the Colombo Consumer Price Index (CCPI, 2013=100), increased to 5.4% in January 2020 from 4.8% in December 2019 due to monthly increases in prices of items in both the food and non-food categories.
In addition, food inflation (YoY) has also increased substantially to a 25-month high of 11.7% in January 2020 from 6.3% in December 2019, while non-food inflation (YoY) stood at 2.9%.
Low-earners vulnerable
Meanwhile, speaking to The Sunday Morning, CBSL Monetary Policy Consultative Committee Chairman Prof. Sirimal Abeyratne said Sri Lanka’s economy was still controlled by weather conditions.
“When the economy moves into ‘advanced’ status, that impact has to be lower or be minimised. But unfortunately, the Sri Lankan economy still gets affected by drought and rain conditions. That’s why we have fluctuations in our cost of living,” he added.
Commenting on the salaries, Prof. Abeyratne said: “Salaries should increase not because of any decision by the Government or commissions, but according to the level of development and productivity improvement. That’s the sustainable way of increasing the income. If the salaries are not enough and if there are anomalies, those things can be corrected temporarily and on a short-term basis, but long-term improvements should come from development and productivity.”
As explained by Prof. Abeyratne, even though Sri Lanka categorised itself as a middle-income country, moderate poverty was still high.
“We say we are a middle-income country, but according to World Bank calculations, two million people are earning less than Rs. 575 per day and we have eight million people earning less than Rs. 1,000 per day.
“We calculate the percentage of poor as 4%, i.e. according to our national poverty line where earnings are less than Rs. 5,000 per month. This is the ‘survival expenditure level’ for a person. So we have 4% of the population who don’t even earn a survival-level salary,” he stressed.
“And if we look at moderate poverty, we have eight million people earning less than Rs. 1,000 per day. That’s really troubling as far as our development status is concerned. Whenever food prices increase, these segments are highly vulnerable,” he added.
Reduced consumer taxes, increased PAL
Speaking to The Sunday Morning, Janatha Vimukthi Peramuna (JVP) politburo member Wasantha Samarasinghe stressed that the people of the country were suffering under the burden of a high cost of living, pointing out that even though the Government reduced taxes recently, they took steps to increase the Port and Airport Development Levy (PAL), which in turn caused increases in the prices of imported goods.
He added that if this did not change, the people will continue to be burdened.
The Consumer Price Index (CPI) has not changed for the last seven years – it is supposed to be changed every five years. The prices of essential goods have increased, but the salaries have not increased in parallel. “Therefore, we urge the Government to review and increase all public, private, and estate sector salaries to match the cost of living,” Samarasinghe said.
He went on to say that even though the daily wage of the estate sector workers had been increased by the Government, the workers were not yet getting paid the higher amount.
Speaking to The Sunday Morning, Government Spokesman Keheliya Rambukwella noted that the salaries of workers in all sectors would be revised by the new Government through the new budget.
“During the past period of the Rajapaksa administration, we had been making additions to the salaries considering the Cost of Living Index (CLI), and we will continue that. From 2007, irrespective of the war, we had been paying a considerable amount.
“But what happened was the last Government agreed to pay Rs. 10,000, but scattered. Over the period of five years, we started paying Rs. 2,500,” he added.
“In accordance with the CLI, there will be certain increments. But you need to have a new Government and budget. Now, we have a Vote on Account and the Government can’t add additional expenses and can only have recurrent expenditure. We will definitely take the issue of salary increments under serious consideration. This could become a reality with the new Government and a new budget,” Rambukwella stressed.