AKD mis-categorises expenditure in assessing Rajapaksa budget

Fact Check

In his statement, the MP refers to expenditure through ministries headed by the Rajapaksa family and relatives. To check the MP’s claim, FactCheck.lk consulted 2022 Budget speech, which provides the full expenditure proposals, and the Budget Estimates for 2022, which provides the ministry level allocation of expenditure.    

The total expenditure allocations under 6 members of Rajapaksa family are LKR 1,827 billion (See Exhibit 1) and amounts to 46.7% of government expenditure of LKR 3,921 billion (see Exhibit 2).   

The 64% figure quoted by the MP is flawed for two reasons. The first and more serious flaw is that it included public debt amortisation (capital repayments of loans), which is not an expenditure item under public accounting standards. Second, it is based on the numbers in the Appropriation Bill, which had been superseded by the 2022 Budget tabled in parliament about a week prior to the statement.   

Therefore, we classify the MP’s statement as FALSE.  

 Additional note: In the proposed budget, the total allocation recorded with public debt amortisation (LKR 5,452 billion) added, takes the share of allocation recorded under the Rajapaksa family headed Ministries to 61.6% of the total allocations with amortisation added (LKR 3,359 billion). This is because public debt  amortisation allocation (LKR 1,531 billion), which is not an expenditure item, is recorded within the Ministry of Finance. 

*FactCheck.lk’s verdict is based on the most recent information that is publicly accessible. As with every fact check, if new information becomes available, FactCheck.lk will revisit the assessment. 

Right of Reply

MP Anura Kumara Dissanayake’s response to the fact check:

“According to the above critical assessment published in the Daily Mirror, the statement made by me in Parliament contains inaccuracies. 

My clarification and correction of the above is as follows: 

As per 2022 Budget, payment of Rs. 1531 Billion as Loan instalment is included in the Rs.  2763 Billion Expenditure. 

Apart from the loan instalment (as per the attachment 01 of the Budget) in the second attachment of the 2022 Budget, the total expenditure of the government is Rs 5245 billion. 

As per the total expenditure covering the Rajapaksa family in the 2020 budget estimates including President Gotabaya Rajapaksa, Prime Minister Mahinda Rajapaksa, Finance Minister Basil Rajapaksa, Youth Affairs and Sports Minister Namal Rajapaksa, is Rs 3470 billion. This figure includes the loan instalment of Rs 1531 Billion. 

Accordingly out of the state expenditure of Rs. 5245 Billion, the amount of Rs 3470 Billion is exceeded by 64%. 

For a long period it has been a case of avoiding the loan instalment from the government expenditure. Our argument is since the loan instalment is included in the Finance Ministry expenditure, it should be included in the total government expenditure.” 

Thanks 

Anura Kumara Dissanayake  

MP – Jathika Jana Balawegaya

Factcheck’s counter response to MP Anura Kumara Dissanayake

FactCheck.lk appreciates the response of MP Anura Dissanayake. 

FactCheck.lk noted not one, but two errors in the 64% figure claimed by MP Dissanayake. First was the miscategorisation of loan amortisation as expenditure. Second was the inaccuracy of even the miscategorised calculation with regard to the budget tabled in parliament. Both these reasons were cited by FactCheck.lk in explaining the verdict. 

In response to the fact check, MP Dissanayake discusses only the first error: Stating that it should be reasonable, nevertheless, to include amortisation in evaluating the total expenditure of government as the loan repayment figure has been stated under the head of the Ministry of Finance.  

This consideration was already discussed in the published fact check: https://factcheck.lk/claim/anura-kumara-dissanayake-7

In evaluating government expenditure (e.g., claims on the expenditure percentage on health care, education etc.) the figures routinely cited in parliament, by the MP himself, follow the public accounting standard of excluding amortisation (loan capital repayment) from the calculation of expenditure. Similarly, in public finance accounting, cash inflows arising from loans taken are not considered a revenue item either.  

These principles of reporting on public finance, which are prescribed by the Central Bank of Sri Lanka, are as provided in the Government Finance Statistics Manual published by the International Monetary Fund (see page 71). Even if the language that MP Dissanayake had used had been modified to explain that he was including expenditure plus amortisation payments, his claim would have still overstated the Rajapaksa family budget by 2.4%. This was also explained in the published fact check. 

In light of the above, the response by the MP, which is appreciated by FactCheck.lk, does not provide any new information to justify updating the verdict.