Sri Lanka’s embassy in the United States spent Foreign Ministry funds on steaks, cognac and pornography stated Foreign Minister Mangala Samaraweera, in a startling revelation to parliament on Friday.

Mr Samaraweera stated that staff at the embassy had "adult films, $200 shots of cognac and $288 steaks” under the previous government.

“Millions of rupees were wasted, mainly through the Foreign Minister’s vote on extravagances,” he added.

The foreign minister went on to state over 330,000 US dollars went missing in one property transaction, undertaken by the embassy.

Sri Lanka's Prime Minister Ranil Wickremsinghe reassured parliament on Friday that German car giant Volkswagen had not suspended its work in establishing a car plant in Kuliyapitiya, after concerns were raised about a delay in starting the construction.

The government information department quoted Mr Wickremesinghe as saying that the factory will commence operations within 2 years. “Volkswagen investment came to the country before 2015,” the prime minister is reported to have said.

“The company has made an investment of 265 million US Dollars and it will create around 200 job opportunities,” Minister of Development strategies and International Trade Malik Samarawickema said to parliament.

Sri Lanka's budget for 2016 was passed in parliament on Friday with a majority of 109 votes, with 160 votes in favour and 51 votes against it while 13 members were absent.

The budget passed after major changes were made by the government, with Finance Minister Rai Karunanayake warning parliament that the changes to the budget proposals would cost the treasury Rs35,000 million more, including the increase in a state sector employee’s basic salary by Rs2,500 from January next year.

The Millennium Challenge Corporation has approved Sri Lanka as eligible for the body's "threshold" programme, which will release  around $30mn worth of funding, providing assistance to the government's efforts to enact reforms in areas which constrict economic growth.

"Sri Lanka has embarked on a remarkable effort over the past year to reinvigorate its democratic institutions, improve governance, and restore protection of human rights," a statement by the MCC said.

The MCC, an independent US government agency working to reduce global poverty through economic growth. allocates budgets depending on how countries score on specific indicators. According to the MCC website, threshold programmes "assist countries to become compact eligible by supporting their efforts to implement key policy and institutional reforms and thereby demonstrate their commitment to MCC’s eligibility criteria" and if implemented successfully will "reduce constraints to faster economic growth and provide MCC critical information about a candidate country’s political will and capacity to undertake the types of reforms that would have the greatest impact in compacts". 

Sri Lanka's Prime Minister Ranil Wickremesinge said relations with the British government remained on a "sound footing", despite the absence of a designated ambassador in London.

Responding to a question in parliament about the unfilled consular position, the prime minister said the officer leading the mission in London is able to speak directly to Prime Minister David Cameron, the Daily Mirror reported.

The Sri Lankan government’s proposed Penal Code amendment on hate speech “directly contravenes” pledges made in a UN Human Rights Council resolution said the Tamil National Alliance, adding that it is “nearly identical” to the notorious Prevention of Terrorism Act used to target Tamils and Muslims.

Strongly opposing the amendment, the TNA stated the amendment is “nearly identical to Section 2(1)(h),” adding “the previous government used this very provision to target persons from the Tamil and Muslim communities and to deprive them of their freedom of speech and expression”.

The statement went on to recall the cases of Tamil journalist J.S. Tissainayagam and Muslim politician Asath Salley, both of whom were detained under Section 2(1)(h) of the PTA. “Both these persons were critical of the previous government’s policies, particularly with respect to the treatment of minority communities,” said the TNA. “These incidents and others like them prompted international condemnation of the previous government’s use of the PTA to suppress media freedom and dissent.”