MPs defy Treasury on budget allocation

National Treasury Principal Secretary Kamau Thugge. FILE PHOTO | NMG 

By EDWIN MUTAI

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Summary

• The move signals MPs’ determination to pay themselves billions of shillings in severance perks at the end of their term in August.
• Parliament’s Sh40 billion budget shows that allowances paid to MPs will jump to... Sh7.2 billion in the year starting July from Sh4.5 billion in the current year.
• MPs have been pilling pressure on the Treasury to allocate money for purposes of compensating them for the shorter period they will have served when their term comes to an end on August 7.

Parliament has defied the Treasury and maintained its budget at Sh40 billion, signalling the MPs’ determination to pay themselves billions of shillings in severance perks at the end of their term in August.

The Budget and Appropriations Committee Thursday submitted National budget documents to the House for debate without the Sh4 billion cut they were said to have agreed with the Treasury on Monday.

Principal secretary Kamau Thugge had in the morning told journalist that parliamentarians had agreed with the Budget and Appropriations Committee (BAC) to cap Parliament’s budget in the year starting July at Sh36 billion and not the Sh40 billion that the Parliamentary Service Commission (PSC) had proposed.

Parliament’s Sh40 billion budget shows that allowances paid to MPs will jump to Sh7.2 billion in the year starting July from Sh4.5 billion in the current year.

It will then drop to Sh4.6 billion in the year starting July 2018, signalling that the extra Sh2.6 billion is either tied to MPs’ end of term severance pay or car grants for new MPs who will assume office in September.

“We did discuss with the Budget committee two days ago and agreed with the earlier ceiling of Sh36 billion, which didn’t include the severance pay. That is our position as the Treasury and we hope MPs will stick to that position when they debate the report of the Budget committee for the 2017/18 budget estimates,” Dr Thugge told a pre-budget breakfast meeting with Journalists at InterContinental Hotel.

The PS said the Treasury’s position is to maintain the PSC budget ceiling at Sh36 billion and Sh18 billion for the Judiciary.

He ruled out allocating MPs Sh2.6 billion in severance pay to compensate the legislators for the eight month shaved off their five year term.

MPs have been pilling pressure on the Treasury to allocate money for purposes of compensating them for the shorter period they will have served when their term comes to an end on August 7.

The 11th Parliament has a shorter life span having been elected into office in March 2013 or eight months after elections were due in August 8, 2012. The Constitution demands that Kenya goes to the polls every second Tuesday of August of the fifth year.

“The Public Finance Management Act (PFM) requires that if we table our budget in Parliament and the House increases certain expenditures, they (MPs) must find some savings from the same budget to cover the increment.

“We hope they will stick with the Sh36 billion budget ceiling so that we don’t cut other expenditures,” Dr Thugge said without elaborating the Treasury’s fall back plan in the event BAC defies the Sh36 billion ceiling and allocates PSC Sh40 billion.

READ: MPs give aides Sh.2.2bn send-off pay at end of 5-year term

Dr Thugge however clarified that the Sh36 billion PSC budget ceiling does not contain MPs “severance perks.”

MPs are demanding one-off payments, including severance allowance for the shorter term and gratuity payments upon completion of their term — which is paid straight from the consolidated fund.

If MPs get their way and allocate themselves the Sh2.6 billion allowance, each of the 418 MPs will take home Sh6.2 million, pushing their total send-off package to Sh12.9 million.

MPs are entitled to gratuity payments of Sh2.8 billion at the end of their term on Election Day.