Principals told to trim Cabinet to ease crisis

By James AnyanzwaPresident Kibaki and Prime Minister Raila Odinga may have proposed exciting measures to deal with the soaring food and fuel prices, but a bloated Cabinet stands in the way.
Experts point at the bloated Cabinet, arguing trimming the number of ministries from 42 to 22 could help free funds to cushion the poor from skyrocketing commodity prices.
The bloated Cabinet, which was prompted by the power sharing accord of 2008, costs the Exchequer a massive Sh60 billion per annum to maintain.
It is argued that the National Accord should not be an excuse to retain the Cabinet of 42 ministers and more than 50 assistant ministers.
The requirement under the new Constitution is that the country should have (a maximum of) 22 ministers. If Kibaki and Raila were to reduce the Cabinet by half, the Government can save about Sh30 billion per annum.
With a projected annual budget of Sh3 billion, the amount can finance free primary education for two parliamentary periods – ten years.
Alternatively, the savings from the trimmed Cabinet can build and equip referral hospitals, the size of Kenyatta National Hospital, in each of the 47 counties.
The measures announced by the PM last Wednesday included zero-rating of kerosene, removal of import duty on maize and wheat, and a pledge for salary increment for low-income earners.
The principals also hinted at plans to fund the proposed austerity measures by taxing the rich.
" When you reduce tax in one area you must find a way of filling up the hole. The Treasury must tax the rich more to provide for the poor," the PM said. Equally, as Kenyans languish in poverty, MPs are laughing all the way to the bank for an estimated Sh1.2 million in untaxed salaries and allowances every month.
The cash includes a basic salary of about Sh300, 000, a minimum commuted mileage Sh75, 000, entertainment allowance Sh60, 000, extraneous allowance Sh30, 000, house allowance Sh70, 000, and monthly car maintenance allowance of Sh247, 000.
The MPs also claim mileage calculated at Sh115 per kilometre and gymnasium membership allowance of Sh2,000.
Foreign tripsMinisters on the other hand earn at least Sh1.5 million per month. This figure could triple depending on the number of foreign trips one takes.
Certainly Kenyan ministers, their assistants, and MPs are among the highest paid anywhere in the world.
Unlike in most other countries, where an independent committee sets salaries for MPs, Kenyan MPs have hitherto determined their own pay.
The new Constitution denies them the power to pay themselves as they want.
This set of public officials who hardly pay taxes, also enjoy some of the best pension, medical, insurance, and car packages.
All this is happening even as the country begs for money from international donors and as many people die from hunger, HIV/Aids- related diseases, and widespread poverty.
Surprisingly, the Kenyan President also earns more than the US President and British Prime Minister. But Kenya relies on these countries for development financing.
The US President earns an annual salary of US$400,000(Sh33.2 million), or about Sh2.7 million a month. The British Prime Minister earns £142,500 (Sh20 million) per year, and just about Sh1.6 million a month – all taxed.
The 2010 statistics from The Economist indicate the ratio of a political leader’s pay to the country’s gross domestic product (GDP) in Kenya, is the highest in the world at 50 per cent.
This means a political leader in Kenya earns US$427,886 as basic salary per year, which is equivalent to more than 240 times the country’s GDP per person. In China and India a political leader’s pay to GDP stands at only two per cent, and 1.5 per cent.
Extra allowances Towards the end of the Ninth Parliament, MPs also voted themselves Sh1.5 million gratuity making the Kenyan Parliament probably the only institution in which employees are paid gratuity and pension.
Further, the Vice-President, ministers, parliamentary whips and Parliamentary Service Commission members are paid extra allowances, sometimes amounting to Sh300, 000 a month. Whether the impact of the proposed measures will trickle down to the common mwananchi remains to be seen. But trimming a bloated is a good place to begin to reduce tax burden on wananchi.