Sri Lanka: Former Prime Minister tables resolution to resolve economic downturn

Former Prime Minister Ranil Wickremesinghe today called on the House of Parliament to engage young people protesting in the streets and invite them to discuss the current crisis and possible solutions.

He also tabled a set of proposals for discussion that would see Parliament extend its control over public finances. These included strengthening the powers of committees such as COPE and COPA and the Public Finance Committee to extend oversight of accounts and expenditures. He also urged that capital spending be halted and divestment of state assets halted until parliamentary approval is provided.

The former Prime Minister, while giving his full support to the re-enforcement of the 19th Amendment, called for the complete removal of the 20th Amendment. He further criticized recent Cabinet appointments, saying that even 4 ministers did not attend Parliament today.

Below you will find a copy of the discussion proposals tabled in Parliament as well as a copy of the speech.

Considering that the unsustainable external debt, the collapse of the currency and the severe deficit in public revenues, among others, have led to a declaration of bankruptcy by the government; and

AND Whereas Section 148 of the Constitution gives Parliament full control of public finances – a principle that has been repeatedly reinforced by the Supreme Court, including in the recent Supreme Court decision SCSD1-9 of 2022; and

AND Whereas anything done in violation of Section 148, including any decision or action taken, without the approval and/or authority of Parliament, is void and/or void;

AND Considering that Article 43 of the Constitution places the Cabinet of Ministers under the control and direction of Parliament, and whereas Article 42 likewise provides that the President is responsible to Parliament;

AND Whereas the present circumstances require Parliament to, among other things, ensure good governance and, to this end, to exercise its powers under the Constitution, including sections 43 and 148.

IN THE CIRCUMSTANCES, it is hereby resolved that the following immediate measures be taken:

1. Parliament, in the exercise of its powers, empowers

(i) The Public Finance Committee shall investigate and report on the state of public finances, including the amendment of the Finance Law 2022 to ensure

financial provisions for the protection of vulnerable groups;

(ii) The Public Enterprises Committee responsible for investigating and reporting on the financial situation of public enterprises

(iii) Temporarily suspend all capital spending on new projects, including SOE expansion projects;

(iv) Suspend all dispositions, including sales and/or leases, of assets or enterprises controlled and/or owned by the State. Any government decision to divest the above assets/businesses must first be communicated to Parliament.

2. Call on the Prime Minister to submit a statement on the situation regarding the supply of food, medicine, fertilizer and fuel until August 2022;

3. Establish oversight committees of Parliament in accordance with Article III of the Standing Orders.

4. Appoint the following parliamentary committees:

(i) Ways and Means Committee to report on the measures needed to mobilize additional revenue for the Government;

(ii) A banking and financial services committee responsible for reporting on the financial situation of banks and financial services companies and the measures necessary to ensure the stability and sustainability of the financial sector, including a safety net; and

(iii) An Economic Stabilization Committee responsible for reporting, among other things, on the measures taken by the Government to restore macroeconomic credibility.

5. Ensure that the Monetary Council complies with its objectives set out in Article 5 of the Monetary Law and that the Central Bank refrains from financing the deficit without the approval of Parliament;

6. Establish a Parliamentary Budget Office;

7. Appoint a select committee

a) Interview and report on persons responsible for

(i) Float currency

(ii) Denying the unsustainability of external debt, thereby causing bankruptcy, and

(b) Review the State Accounts for the years 2020, 2021 and 2022.

8. Appoint a select committee to review and report on measures needed to strengthen parliamentary control over public finances, including the new Budget Management (Accountability) Act. The Committee considers the following elements:

(i) Budget Responsibility and National Audit Act 2011 (UK)

(ii) Public Finance Act (New Zealand)

(iii) Fiscal Management (Accountability) Act (New Zealand)

(iv) Financial Administration Act (Canada)

(v) Public Financial Management Act (South Africa)

(vi) Public finance management and central law (Turkey)

(vii) UK practices and procedures for auditing public finances

including the Fiscal Accountability Code, Public Expenditure Plan,

Expenditure review and clear line of sight Reforms

9. That the honorable President be authorized to take all necessary measures to implement this resolution.

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