Mini-budget is ‘inflation bomb’ for masses, Shehbaz tells Umar

–NA Opp leader criticises PTI govt for imposing Rs183bn taxes, burdening nation by increasing gas prices

–Says slashing of PSDP funds will affect education, health, infrastructure and even CPEC

–Criticises govt’s decision of lifting restrictions on purchase of vehicles and properties by non-filers

–Finance minister defends budget, promises crackdown on tax evaders through stronger implementation of existing policies

ISLAMABAD: Leader of the Opposition in the National Assembly Shehbaz Sharif on Monday came down hard on the Pakistan Tehreek-e-Insaf (PTI) government’s economic policies, saying the “flag-bearers of change” have dropped an ‘inflation bomb’ on people in the form of ‘mini-budget’.

Highlighting the shortcomings of the mini-budget during the debate in the National Assembly, Shehbaz said that the Pakistan Muslim League-Nawaz (PML-N) has rejected the “anti-people mini-budget” presented by the finance minister.

Shehbaz said the budget has come with the imposition of new taxes amounting to Rs 183 billion. “The mini-budget proved to be a mini-bomb of inflation dropped on the people,” he added.

The former Punjab chief minister also took the government to task for increasing the price of gas, saying it will prove to be detrimental for economy. “The masses will bear the burden of increase in the price,” he said.

The government had earlier in the month increased gas prices on consumers by up to 143%, besides introducing new slabs in the tariff to spread the price increase more effectively according to gas consumption.

PTI RESORTING TO NEPOTISM:

Shehbaz also criticised the government for “failing its supporters” by “displaying nepotism and turning back on its election promises”.

“PTI raised slogans of Naya Pakistan and promised to establish merit. They had claimed that they will bring forth the best team, whether it’s their opening batsman or a spin bowler. Alas! Today we see personal friends, servants and imported advisers everywhere,” Shehbaz said in an apparent reference to the appointment of Prime Minister Imran Khan’s friend Syed Zulfiqar Abbas Bukhari, better known as Zulfi Bukhari, earlier on Monday as a special assistant to the prime minister for overseas Pakistanis and human resource development.

The opposition leader also targeted the PTI government’s austerity drive, calling it “a way to fool the public”.

Shehbaz recalled the “milestones” achieved by the PML-N government by providing subsidised fertiliser and power to the agricultural sector and by establishing a forensic lab and starting the Safe City Project, both in Lahore.

He claimed that the slashed funds for the Public Sector Development Programme (PSDP) would adversely affect growth and development.

“The PML-N government had increased the PSDP fund from Rs 300 billion in 2013 to Rs 800 billion in 2018, but Asad Umar has wielded an axe over the [PSDP] and reduced it to Rs 575 billion. The difference of Rs225 billion is a very big amount!” he said.

The PML-N president said that the alternative solutions offered by Umar to cover up the difference — which included partnerships between public and private companies — were not practical.

“This is not how it is done Mr Speaker!” Shehbaz Sharif insisted, adding that PSDP can only be funded by the government.

“The suggestion that you’ll use other methods to fulfill the goals that must be met by PSDP makes no sense. PSDP funds have been slashed by 30%, which means education, health, infrastructure, even CPEC has been slashed by one-third!”

CPEC SHOULD NOT GET AFFECTED:

Shehbaz said that he had difficulty believing the assurances given by the information minister and finance minister that CPEC will not be affected in any way, since the project was part of PSDP.

“I did not expect that a genius like Asad Umar would slash the PSDP like this,” he said, expressing hope that the government will reverse its decision on the policy it has adopted.

“CPEC is important for the prosperity and progress of the country. Unfortunately, the government is deliberately trying to create confusion over the project,” he added.

“We were astonished to see how the government received the Chinese foreign minister in Islamabad,” the PML-N president, adding that the foreign minister should have been given special protocol.

Shehbaz also criticised the government’s decision of lifting restrictions on the purchase of vehicles and properties by non-filers.

“The government is also giving incentives to non-filers and tax evaders which our government had curtailed,” lamented Shehbaz. “The already burdened tax payers are asking where they should go.”

On the issue of dams, the opposition leader acknowledged that construction of dams is inevitable for Pakistan’s prosperity, adding that the opposition will support the government in this matter. On the construction of Kalabagh dam, the PML-N president called for a consensus of all the provinces.

“The PML-N government spent Rs122 billion on purchasing of land for the dams and also allocated Rs23.6 billion in the current budget,” Shehbaz said, requesting the government to transfer Rs225 billion to Bhasha Dam.

Shehbaz also suggested that all political parties should sign a charter of economy like the Charter of Democracy signed between the PML-N and PPP in 2006.

Talking about ties with India, Shehbaz criticised India for continuously targeting innocent Kashmiris and said that Pakistan has always wanted to establish friendly relationship with its neighbours.

Later, former planning minister Ahsan Iqbal also criticised the government for creating confusion over CPEC projects and said that not even a single penny was included as loans in projects worth $35 billion under CPEC.

UMAR RESPONDS:

Responding to Shehbaz’s criticism, Umar remarked wryly: “Going by what he [Shehbaz Sharif] has said, it seems to me that had the opposition leader been the finance minister [in the past government], we would not have been facing the troubles that we do today.”

Defending the increase in gas prices, Umar pointed out that the poor only have to bear 10% of the price hike as most of the burden has been transferred to the upper class.

“The PTI government had not even been sworn in when OGRA (Oil and Gas Regulatory Authority) recommended that gas prices be raised by 46% due to a loss of Rs154 billion that had occurred in one year. Were we [the PTI government] the reason behind that loss?” he asked.

“All we could do [right now] was ensure that the burden of the price hike does not fall solely on the poor.”

He also highlighted his government’s decision to extend a Rs 44 billion subsidy on gas supplied to export industries in Faisalabad, “where 500,000 labourers have been rendered jobless and machinery was being sold at the rates of scrap metal”.

Speaking on the ballooning circular debt, he criticised the PML-N government of not capitalising on historically low crude oil prices during its tenure and asked how it had squandered a huge advantage.

Saying he did not doubt the opposition leader’s concern, Umar said Shehbaz Sharif seemed to have been misled regarding the actual size of the circular debt as the past government utilised accounting jugglery to misrepresent the reality.

The finance minister said that circular debt had, contrary to the opposition’s claims, actually reached Rs1,180 billion when the PTI government took over.

“Circular debt, which was around Rs503 billion in 2013, swelled to Rs 1,180 billion by 2018 despite the one-time clearance by the PML-N government.”

Moreover, he said that the currency was devalued against dollar during the past 15 months.

“The fall of rupee and increase in energy prices in the international market in last 15 months is more than 50%,” he said.

Moving on to tax increases, Umar explained his reasoning behind major decisions in his finance bill amendments.

He noted that the government, despite the oil price surge in the international market and contrary to OGRA’s recommendations, had announced only an average 30% increase in gas prices. He again reminded the assembly that the brunt of that hike would be borne by those who consumed more units of gas than the average consumer does.

He pointed out that most consumers from lower-income class who had to use cylinders — as their houses were not connected to the grid — previously paid a 30% tax on their consumption which the PTI government had reduced to 10%.

“We have reduced the [financial] burden for the poor,” he said.

Umar also said that the government had offered subsidies to farmers on both gas and fertiliser. He went on to remind the house that the previous government’s decision to export a large amount of urea had led to a shortage of fertiliser at home and increased cost of production for farmers.

Speaking about increases in other taxes, Umar said that the government had raised taxes on 1,800 CC plus cars. Furthermore, he noted that regulatory duties were raised on imported luxury food items like cheese and chips, etc; expensive smartphones “bought by people like you [referring to the speaker] and me, not by poor people”; and other products that are not going to impact the purchasing power of lower-income people.

He then reminded the house that it had only been a month since the PTI came to power.

“Wait and see what happens,” he said, promising a crackdown on tax evaders through the stronger implementation of existing policies rather than radical new measures.

“I am warning tax evaders: start paying up your due share of taxes. Do not think we are the same government that was in power for the last five years. We will show you how tax collection is done,” he said.

Later, saying that he had repeatedly invited the opposition to put forward their grievances on the assembly floor so that a solution can be reached with consensus, Umar urged detractors to approach the “natural platforms” — the National Assembly and Senate’s finance committees — to raise their issues.

As an example of his openness to receiving criticism positively, Umar revisited his decision to allow non-filers to purchase property and vehicles, noting that there were conflicting opinions on it and promising to incorporate criticisms and modify the policy accordingly.

“If a good proposal comes from you, we will be more than happy to accommodate it,” he said.

PM QUESTION HOUR:

Earlier, Minister of State for Parliamentary Affairs Ali Muhammad Khan presented the PM Hours bill to include a questions hour during which the premier will answer the queries in parliament every Wednesday.

The move to introduce question hour was appreciated by the opposition.