Kenya Finance chief rejects MPs pay plan

July 2, 2010 12:00 am

, NAIROBI, Kenya, Jul 2 – The proposal for Members of Parliament to pocket higher allowances and salaries has hit a snag after the Treasury indicated it would not table necessary Bills to legalise it.

Finance Minister Uhuru Kenyatta appeared to agree with public outrage after he declined a plan from Parliament to forward three Bills that would have given the new perks much needed legal basis.

The MPs postponed a planned two month recess this week and asked Mr Kenyatta to table the Bills next week, so they could pass them before the break.

In a statement sent to newsrooms late on Friday, Mr Kenyatta said the proposal could not be accommodated since it was not factored in the 2010-2011 Budget that he presented to the House last month.

“This is clearly not sustainable and is inconsistent with our development objectives stated in Vision 2030,” said Mr Kenyatta.

He added: “The actions taken by Honourable Members are not supportive of these noble objectives because they will trigger demands for salary increment by other sectors.”

Mr Kenyatta feared that an increase in the earnings paid to the already well-salaried legislators would “consequently lead to a wage spiral, hence creating inflation and weakening our competitiveness.”

Public fury and uproar has persisted in the last two days after 30 MPs voted to double their allowances and allocate themselves outrageous pay increases.

Lawmakers debated and approved the report of the Parliamentary Service Commission in a record 30 minutes.

An MP’s monthly basic salary would have increased to Sh1.2 million up from Sh871,000 while the Speaker would have earned Sh2.8 million up from Sh1.5 million according to the proposal tabled in Parliament on Wednesday.

Prime Minister Raila Odinga and Vice President Kalonzo Musyoka would have been the biggest beneficiaries and could have earned hefty salaries amounting to Sh3.2 million and Sh2.7 million respectively.

The Parliamentary Service Commission report proposed that the Speaker be entitled to a sitting allowance of Sh30,000 up from Sh10,000 while MPs will take home Sh10,000 up from Sh5,000 per session. 

 The new perks had originally been proposed by a Tribunal that was headed by former Court of Appeal judge Akilano Akiwumi.

The PSC however reviewed the Akiwumi proposal upwards.

 The tribunal had recommended Sh2.9 million for the PM, Sh2.1 for the VP, Sh2.1 million for the Speaker and Sh1.1 million for MPs. The legislators nonetheless agreed taxation of their transport, entertainment and responsibility allowances.

In total an MP will submit Sh776,000 out which would be taxed.

The PSC doubled the proposed payments on the basis of the effects of inflation, and the resolve to pay tax on some of their allowances followed public pressure.

In dealing a blow to the proposal Mr Kenyatta stated: “The budget estimates as presented had exhausted the resource envelope that could be realistically mobilised. Therefore, the additional expenditures can only be financed either through additional borrowing or imposition of higher taxes, both of which have far reaching adverse economic and social consequences.”

The Finance Minister said he would continue consulting the MPs to see how best to address the Akiwumi report recommendations.


Latest Articles

News Podcasts

Most Viewed