Monday, July 5, 2010

Kenya: Uproar Over MPs' Proposed Salary Increase

Kenya MPs' efforts to award themselves a huge pay raise have suffered a setback after Finance minister Uhuru Kenyatta declared that Treasury has no money to accommodate the increase.

Mr Kenyatta, who had been expected to table three bills in Parliament next week to legalise the new salaries maintained that there was no budgetary allocation to cater for the pay raise.

"The public will also recall that I presented the Budget Estimates for the Financial Year 2010/11 on 10th June 2010. These estimates do not include any additional allocations to the National Assembly for salaries and other benefits," Mr Kenyatta said in a statement.

He said the Budget had exhausted all available resources meaning that the new salaries could only be financed either through additional borrowing or imposition of higher taxes, both of which he said would have far reaching adverse economic and social consequences.

Reduce tax burden

He reminded MPs that they had been vocal in condemning excessive borrowing and had been advising on the need to reduce the tax burden on Kenyans.

"The actions taken by Hon Members are not supportive of these noble objectives because they will trigger demands for salary increment by other sectors. Consequently, these will lead to a wage spiral, hence creating inflation and weakening our competitiveness," Mr Kenyatta warned.

"For these reasons, we are have initiated a process to further engage the Hon Members to discuss way in which these issues can be addressed."

The new perks were recommended by a tribunal chaired by retired judge Akilano Akiwumi.

The Parliamentary Service Commission, however, revised the tribunal's recommendations upwards before tabling the report in Parliament for debate and adoption.

The report was tabled in Parliament on Wednesday by PSC vice chairman Walter Nyambati and adopted the same day.

Tabling the report, Mr Nyambati urged Mr Kenyatta to table before the house the bills to give the recommendations legal effect.

Had they been passed, MPs would have started enjoying their new salaries this month but Prime Minister Raila Odinga and his two deputies, Mr Kenyatta and Musalia Mudavadi would have had theirs backdated to May 2008 when they took office.


The MPs move was greeted with outrage from the civil society and Central Organisation of Trade Unions (COTU) with Kituo cha Sheria threatening to petition Mr Kenyatta not to table the bills for debate to legalise the increments."We are going to present a petition to Mr Kenyatta not to present the bill and to urge him to act in the best interest of suffering Kenyans. We know he let us down when he failed to tax MPs, but we urge not to bow to MPs pressure this time," Ms Priscilla Nyokabi, the executive Director of Kituo cha Sheria said on behalf of other NGOs.

Cotu deputy secretary general George Muchai termed the MPs' move retrogressive while Muslim for Human Rights described it as greed.

According to the recommendations, an ordinary MP was to take home Sh1.2 million in basic salary and allowances, up from the current Sh851,000.

These included Sh300,000 basic salary, Sh130,000 constituency allowance, Sh100,000 entertainment allowance, Sh100,000 extraneous allowance, Sh150,000 house allowance, Sh366,000 transport allowance and Sh60,000 car maintenance allowance.

The balance of Sh65,000 represents the five per cent yearly increment to cushion members from the rising cost of living.

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