Sri Lanka scraps perks for ex-presidents in landmark austerity push

COLOMBO — Sri Lanka’s Parliament last week voted to strip former presidents of their lifelong state-funded perks, marking a watershed moment for the island’s political culture and forcing powerful figures, such as ex-leader Mahinda Rajapaksa, to vacate their official Colombo residences.

The break with decades of political tradition — touted in last year’s victorious general election campaign by the National People’s Power (NPP) party under now-President Anura Kumara Dissanayake — was passed on Wednesday by a majority of 150 votes in the 225-member legislature. The decision forces leaders who once reached the pinnacle of state power to return to private life without the cushion of taxpayer-funded privileges.

Some analysts said that while fiscal savings from the move are likely to be modest, the political symbolism of the shift is deep. They noted that it underscores the NPP’s commitment to cutting waste and responding to public anger over elite entitlement in the wake of the country’s worst economic crisis since independence.

But, some critics argue the repeal is less about principle and more about punishing the political old guard, raising questions about whether the government is wielding reform as a weapon.

Until now, Sri Lanka’s former heads of state have been entitled to government-funded housing in a plush part of the commercial capital of Colombo, along with vehicles, staff and security for life. Those perks cost taxpayers over 1.1 billion Sri Lankan rupees ($3.6 million) in 2024, a government minister said during a news conference last year. The repeal eliminates those benefits, though pensions remain for now.

During last week’s parliamentary debate, Justice Minister Harshana Nanayakkara said that retired leaders in countries such as India, Singapore, the U.K. and the U.S. receive some privileges because they continue “contributing to the public good.”

“But what do some of ours do?” he asked. “They build palaces for their children and cling to power long after their terms end. What contribution are they really making to the country?”

Mahinda Rajapaksa, left, who served as Sri Lanka’s president from 2005 to 2015, stands next to his brother Gotabaya Rajapaksa, who was president from 2019 to 2022, at a ceremony in Colombo in 2020.   © Reuters

His remarks were widely seen as a swipe at former President Mahinda Rajapaksa’s family, with critics accusing his three sons of enjoying lavish lifestyles without proper employment, sustained through opaque means.

For decades, these benefits ensured presidents remained entrenched in official privilege long after leaving office. That era now appears to be ending. Rajapaksa, who served from 2005 to 2015 and remains a towering figure in Sri Lankan politics, is expected to relocate to his hometown of Tangalle after losing his state residence in Colombo, while several others are also expected to leave their official homes in the coming days.

Paikiasothy Saravanamuttu, executive director of the Colombo-based think tank Centre for Policy Alternatives, sees the change as a significant moment in Sri Lanka’s political history. “[The NPP government] wants to send a clear message that entitled members of the political establishment should not be favored,” he told Nikkei Asia. “Their argument is that these individuals already have homes to return to, so there is no need for the public to bear the cost of providing them with state-funded residences.”

Economists caution against overstating the fiscal gains, as the savings from the repeal are barely 0.01% of the primary surplus of close to 1 trillion rupees in the government budget for the first seven months of 2025. “The real impact is less financial and more symbolic,” said Chayu Damsinghe, head of macroeconomic advisory at Frontier Research.

“Moves like this can help rebuild public trust. People may feel more confident paying their taxes, believing their leaders are no longer above them — though people have been paying their taxes nevertheless over the last few years,” he continued.

Civil society activists argue the bill resonates with long-standing public frustration over inequality. “This is not just about saving tax money, it’s about narrowing the gap between the haves and have-nots,” said Colombo-based activist Melani Gunathilake. “For decades we had people who lived privileged lives and [were] even above the law. The 2022 … protests which sent home former President Gotabaya Rajapaksa were partly about dismantling that culture. This reform is one small but symbolic step in that direction.”

Demonstrators protest inside the Sri Lankan president’s official residence in Colombo on July 9, 2022. Then-President Gotabaya Rajapaksa had just fled as economic crisis engulfed the nation.   © Reuters

She urged the government not to push beyond symbolism. “We still have massive debt, weak record-keeping, and money stolen from the people. Cutting perks is good, but we need transparency in how debt deals are made and stronger recovery of stolen assets,” she told Nikkei.

But, Milinda Rajapaksha, a close confidant of former President Mahinda Rajapaksa, described the move as “100% political.” He argued that Sri Lanka’s tradition of supporting former leaders was about safeguarding the dignity of the presidency as an institution, not individuals.

“This is not about [former presidents] Mahinda Rajapaksa or Maithripala Sirisena or Chandrika Bandaranaike Kumaratunga,” he said. “It is about how we, as a democracy, treat the highest office once someone leaves it. Instead of scrapping them outright, we could have set ceilings, adjusted benefits, and approached this holistically.”

Rajapaksha called the repeal “disrespectful” to institutions and accused the NPP of deliberately weaponizing reform to target rivals. “In Mahinda Rajapaksa’s case, it is a special situation because he ended the 30-year-long war and faced tremendous pressure from various terrorist groups,” referring to the civil war fought between government forces and the Liberation Tigers of Tamil Eelam (LTTE) , also known as the Tamil Tigers, from 1983 to 2009.

“As a country, we have a responsibility to take care of him,” he said. “Our request is to look at these policies beyond individual names and consider them in terms of national governance and how we can regularize such matters. There were many ways this could have been done.”

The article appeared in asia.nikkei