There are 33 members in the North Central Province with the UPFA having 21 seats, while the UNP has 11 and the JVP one. Thus if it comes to a division within the Council, 17 members can form a majority. This crisis began when 18 members of the UPFA presented a no confidence motion against the chief minister with affidavits from all signatories. The full force of the executive presidency was brought into play to prevent power in the NCP from slipping out of the hands of Sirisena’s loyalists. The Governor was instructed not to accept the documents from the dissident group and using the time thus bought, two of the dissidents were bought over by giving them ministerial portfolios. There was a complete purge of the board of ministers of the NCP following this revolt.
Minister S.M.Ranjith resigned and was replaced by Susil Gunaratne. K.H. Nandasena was replaced by M. Herath Banda. H.B.Semasinghe was replaced by Sarath Illangasinghe. R.M.P.B. Ratnayake was sacked and replaced by Sampath Wickremaarachchi. This was a purge that would have had Stalin on his feet applauding. If one sacking and swearing in was done in the morning, another took place in the evening. Some of the sacked ministers heard of their sacking only from the media. The Ministers who were sacked were the most popular provincial politicians in the UPFA group. R.M.PB Ratnayake came first in the Polonnaruwa district. S.M. Ranjith was first in the Anurahapura district. K.H Nandasena came sixth in Anuradhapura district and H.B Semasinghe was third in the Anuradhapura district. President Sirisena’s protege who was made chief minister after he became President, Peshala Jayaratne came second in the Polonnaruwa district. Today, after the purge, the only high vote gainer is Chief Minister Jayaratne with the others being minor figures in the UPFA line up who may never have become ministers in normal circumstances.
When the UPFA/SLFP members in the NCP were in revolt against their Chief Minister, the 18 member dissident group had assembled at former President Mahinda Rajapaksa’s residence in Colombo to seek his advice. He had cautioned the leaders of the revolt, parliamentaian S.M.Chandrasena and Provincial Council member S.M.Ranjith to go slow because of the possibility of the government buying some members over to scuttle the revolt. The 18 PC members who had assembled at MR’s house had in fact openly discussed the possibility of some among their group being bought over and one the PC members present had made the humble request of his brother councillors that if anybody was going to be bought over by the government, to give him the opportunity to be bought because he was in dire financial straits and needed the money! However those who sold out were two others and the councillor in straitened circumstances is out in the cold. Yet, all that took place within the UPFA group. What happened last week was far more important than anything that happened earlier.
The desperate measures taken by President Sirisena to prevent the NCP from falling to the opposition was to prevent the inevitable loss of face that he will have to undergo if he lost his home province to the opposition. That revolt made him dependent on the UNP’s 11 members to maintain power in the NCP and the appointment of one of their number as the Chairman of the provincial council is obviously a payoff for the support given to maintain a Sirisena loyalist chief minister and ministerial team in office. The reason why the UNP has not insisted on sharing the ministerial portfolios is obviously so as not to cause embarrassment to the embattled President particularly because this was his home province. But taking over the Chairmanship of the Council is bad enough. The payoff could not have come at a worse moment, when the NCP is almost on the verge of being dissolved and elections looming.
There is of course the possibility that the government will do whatever they can to dodge the elections; but the damage is already done and whatever election is held next, Joint Opposition speakers will be shouting out from the rooftops about how the NPC Chairmanship which was held by the SLFP was handed over to the UNP at a gathering at the NPC Govenor’s office with the Sirisena loyalist Chief Minister in attendance. The UPFA Chairman of the NCP council has been ousted and a UNP member appointed to that position. Sirisena has thus weakened the SLFP and strengthened the UNP. After this it will be well nigh impossible to convince the SLFP voter that Sirisena is looking after the interests of the SLFP.
Given the position that the UNP finds itself in, it may be the case that they could not afford to help the SLFP free of charge and the appointment of one of their own as the Chairman of the NCP may have been the pound of flesh they extracted from Sirisena so as to keep their own rank and file happy. The fact that the Sirisena loyalists moved to make a member of the UNP the Chairman of the NCP in a situation where the SLFP/UPFA has 21 members in the NCP to the UNP’s 11, will from now on be seen as the provincial equivalent of what Maithripala Sirisena did in 2015 just after he became President by appointing Ranil Wickremesinghe as Prime Minister in a situation where the latter had only 44 MPs in Parliament. Today the UNP has only 11 members in the NCP but they have the Chairmanship of the Council with just weeks to go for the PC to stand dissolved.
What one has in the NCP now is a ‘Hansaya’ provincial administration with UNP majority shoring up an SLFP minority against the JO. A ‘Hansaya’ coalition to face the next local government or provincial election whichever comes first, with the partners in the government contesting under one symbol also makes good sense because that can prevent a division of the pro-government vote. At the local government level where the next election will be held on the first past the post principle, a division of the pro-government vote may prove to be a costly mistake. Under a first past the post system, it makes sense to line up all available pro-government votes behind one pro-government candidate. If a part of the government contests separately in the belief that they can attract a part of the opposition vote by doing the wolf-in-sheep’s-clothing routine, the expected result may not materialise.
Up to now, the Sirisena faction has not been very good at playing the role of a sheep. What took place in the NCP last week now has all the intended little Red Riding Hood’s exclaiming “My, what long teeth you have!” Quite independently of the NCP imbroglio, over a dozen SLFP members of the government were openly talking about leaving the government when the MOU between the SLFP and the UNP ends next month. Even though President Sirisena had requested them to stay with him till December, that seems unlikely to happen. Indeed, the NCP incident where the Sirrisena faction showed its true colours if anything would have led to enhance the resolve of the SLFP dissidents to decamp as soon as is practically feasible. If any member of the SLFP is seeking to decamp from a government that has a tenure of more than two and a half years at the level of the president and more than three years at the parliamentary level, that is a sign of a profound crisis.
The scramble to decamp
The expiry of the UNP-SLFP MOU is only an excuse, with the real reason for the scramble to get out being the fear the younger members of the SLFP group in parliament have about their prospects of re-election if they remain with this government for too long. While many of them would prefer to decamp at the last moment after having enjoyed power for as long as is possible, a last minute defection will not improve their chances of re-election.
Their strategy appears to be to sacrifice two or more years of governmental perks in exchange for being able to survive politically.
While the Hansaya solution may make good sense to the government so as not to divide the pro-government vote, that will however, give rise to a whole raft of new problems when it comes to nominating candidates for elections. If UNP activists are forced to give up their slots to SLFP candidates, that may precipitate a flurry of independent candidacies or even an exodus to the JO’s side. News coming down the grapevine says that there is a UNP dissident group with a registered political party which may directly benefit if a section of the UNP is left out during nomination time in order to accommodate SLFP candidates. Take the NCP for example. This is one province where the provincial council will stand automatically dissolved in October this year. The UNP has 11 sitting PC members who will have to be given nominations. Then there will be six or seven of Maithripala Sirisena’s loyalists who will have to be given nominations on the same list in the event of a Hansaya coalition being formed.
Hence a number of UNP hopefuls seeking upward mobility from the local government level and candidates who had contested earlier and lost and many youth candidates will have to give up their hopes of contesting on the UNP list. This is not going to happen without much disruption and gnashing of teeth and uttering of imprecations. If this happens the UNP dissident group will have a sudden influx of activists from all over the country, and they will be able to hit the ground running. There is a good chance that even if Sirisena’s loyalists contest in a common list with the UNP in a Hansaya coalition, most of them will get wiped out at the elections because the UNP base may not vote outside their party this time. Furthermore, if the SLFP is absorbed into a Hansaya coalition as now seems more likely than ever, the Sirisena faction will become the abject clients of the UNP because they will become almost completely dependent on the UNP vote bank.
The question arises whether Sirisena ever had any vote base among the Sinhalese other than the UNP vote base. Thus far, no election has been held to test his base among the Sinhalese and in fact it his group that most fears an election – not so much the UNP.
Since August 2015, the UNP has been experiencing what the Kandyan aristocracy experienced under the Nayakkars to whom they had ceded the Kingdom. With the Nayakkar’s came hordes of impoverished relatives who all wanted a piece of the pie and the situation reached its intolerable peak during the reign of the last Nayakkar King Sri Wickrema Rajasinghe. Likewise, the UNP never bargained to see a whole horde of SLFP dependents coming with Sirisena and eating up everything within reach like a cloud of locusts.
UNP will need
rejuvenation before 2019
The UNP is also operating at this moment, under certain imperatives. The next presidential election is due before December 9, 2019, which does not leave them much time to gear up to meet a new situation. When the next presidential election comes around, the UNP cannot ask their rank and file to vote for an outsider again. They certainly can’t ask the UNP rank and file to vote for Maithripala Sirisena again because he has given the best portfolios to his SLFP cohorts and starved the UNP of power. If the UNP nominates Sirisena as the next presidential candidate, many in the UNP will simply not go to vote at all. In fact, if the UNP goes to the 2019 presidential polls in the present state they are in, they will be looking at certain defeat. The UNP voter simply cannot take another two and a half years of the present situation.
The only way to rejuvenate the the UNP so as to have at least a fighting chance in 2019 would be to shake Sirisena off the UNP’s back and form a government where the UNP really has power. There are two ways of doing this – one method would be to abolish the executive presidency or to hold an election – any election – so that Sirisena is rendered irrelevant overnight. In the event that an election is held, there are two ways in which Sirisena will be rendered irrelevant. If he contests separately, his SLFP faction will fare badly, which will put an end to his hopes of contesting the 2019 presidential election. The next method, which will have much the same effect, is to form a Hansaya coalition and make Sirisena a client of the UNP, which too will put an end to his hopes of attracting a part of the anti-UNP vote – which will also take him out of the equation.
It has to be said that the UNP managed get that much closer to turning Sirisena into a client by what took place in the NCP last week. The whole argument that the SLFP would be contesting all future elections with a view to forming an SLFP government just turned hollow after the NCP affair. We are now waiting for one of three events to occur. The first would be the long threatened exodus of the SLFP ministers from the government which would turn Sirisena into a cipher immediately. After being abandoned en masse by the people who were supposed to be supporting him, there will be no question of Sirisena being able to make a bid for the presidency again. The next event that can happen is for the three PCs in the NCP, Sabaragamuwa and the East to stand dissolved and for the election process to begin in October. An election will bring to a head the need for the SLFP (Sirisena faction) to decide whether they are going to contest alone or in a Hansaya coalition with the UNP. Either way, an election too would destroy Sirisena. The other event that can take place is the abolition of the executive presidency.
Whatever happens, one thing that is almost certain is that Sirisena’s political journey will come to an end one way or the other when his present tenure ends. Everybody seems to know this except President Sirisena himself. What will define the events between now and the next election will be President Sirisena’s efforts to head off the inevitable.
Inland Revenue Bill could become the next SAITM
Last week, the IMF completed its review of Sri Lanka’s economic performance under the Extended Fund Facility (EFF) arrangement and stated that Sri Lanka’s performance under the program has been ‘broadly satisfactory’. One of the main reasons for them to be satisfied was the ‘fundamental income tax reform’ undertaken by the government by way of presenting the Inland Revenue Bill to parliament. The IMF observed that ‘the new Inland Revenue Act, which has been submitted to parliament, will support fiscal consolidation, make the tax system more efficient and equitable, and generate resources for social and development programs’.
Nobody can find fault with the government for trying to streamline revenue collection. But the way it is done is of paramount importance. The Inland Revenue Bill is now before Parliament. The Ceylon Chamber of Commerce has published a list of amendments that could be made to the Bill at the Committee stage. One of the things they had warned the government against, which is interest to a political columnist, was on the tax on the employer’s contribution to provident funds. The Ceylon Chamber’s observations on this matter was as follows:
“Under the existing IR law the payment made to an employee on retirement by an approved provident fund is exempt from income tax. The payment made to the
employee on retirement from an approved provident fund will consist of his contribution, the employers’ contribution and the interest that will accrue to him while he contributes to the Fund. Under the proposed IR law only the employee’s contribution and the interest income that accrues is exempt from income tax and not the employer’s contribution. This proposal may have far reaching political consequences.”
Counting the employer’s contribution to an employee’s EPF as taxable income is a diabolical way of squeezing more money out of hard working private sector employees. If this is not changed at the Committee stage just as the Ceylon Chamber has requested, there’s going to be a major showdown between the unions and the government. The present government has been passing one supplementary estimate after another to purchase luxury cars for ministers and to renovate ministerial residences and the level of tolerance of the public is at a low ebb. If the government does not back down on this one, we may be looking at another SAITM in the making.