SRI LANKA
With Sri Lanka’s annual Public Service salary and pension bill likely to exceed LKR1 trillion (A$8.3 billion) a year for the first time in history this year, former Cabinet Minister Milinda Moragoda (pictured) has called on Presidential candidates to present their proposals for meaningful reform in the sector.
Mr Moragoda, a senior adviser to former President Mahinda Rajapakse and still influential in Sri Lanka politics, said the budgetary allocation for salaries and pensions for 2019 amounted to LKR685 billion (A$5.5 billion).
“With the addition of the estimated cost of the public sector salary increases of LKR120 billion [A$920 million] this year, the total public sector salary bill for 2019 is estimated to reach LKR805 billion [A$6.4 billion],” Mr Moragoda said.
He said in addition, the budget outlay for pensions in 2019 was LKR212 billion (A$1.7 billion) and was expected to be LKR235 billion (A$1.9 billion) in 2020.
“This will take the annual public service wage and pension bill to in excess of LKR1 trillion,” Mr Moragoda said.
He said public sector salary and pension increases would result in higher inflation and put pressure on the balance of payments, resulting in the depreciation of the Sri Lanka rupee.
“Ultimately, someone has to pay the piper,” Mr Moragoda said.
“The worst option is to fund the salary increases through additional borrowing as increasing public debt to fund recurrent expenditure will be highly detrimental.”
Meanwhile, the Government has decided to remove the country’s Railway Service from the rest of the Public Service.
A Government source said this would remedy salary anomalies in various grades in the Railway Service, which would then do its own recruiting rather than relying on transfers from other areas of the Public Service.
“It will also mean that this cadre cannot then transfer to other parts of the Public Service,” the source said.
Complaints about pay and conditions have led to industrial action on the country’s railways.
Colombo, 5 October 2019
