Treasury CS Njuguna Ndung’u read wrong budget; here’s the right one
National Treasury Cabinet Secretary Njuguna Ndung’u at Parliament Buildings for the reading of the 2023/24 Budget Statement on June 15, 2023.
The Cabinet Secretary, Treasury: Mr Speaker, Sir, first of all I must express my immense gratitude for your acceding to this very unique request for an opportunity to address the House again after the Budget Speech that I delivered from this very Despatch Box just a few days ago.
This is indeed a landmark sitting. Never before in the history of the Kenyan Parliament and history of the budget-making process has the National Treasury asked for and been granted a second audience to amend, make clarifications and pronounce on new policy guidelines after initial delivery of the Budget Policy Statement, as well as publication of the Finance Bill.
Mr Speaker, Sir, I am very grateful for your consideration, and also for the understanding of all Members of Parliament and parliamentary staff who have sacrificed their day off, a Sunday at that, to come back to the Chamber and listen to me again.
This special session has been necessitated by long and careful consideration of the cries and pleas of our employers, the Kenyan citizens, who we serve and whose interests and welfare must take first priority.
We have had a second look at all the numbers that inform the Budget statement and come to the conclusion that a lot of our revenue projections and spending plans must be rationalised in line with the prevailing harsh realities.
Mr Speaker, we have a tradition in this country of drawing up national budgets based on fanciful wish lists and populist political promises, rather than the base of available resources. In that regard, we are embarking on a key policy turnaround. Budgets will be based on what we can realistically expect in the kitty from taxation, borrowing and aid.
Radical revision
The same principles that apply to a household will apply to our national budget.
I do not intend, Mr Speaker, to at this time to go into detailed numbers, but just enunciate on the basic principles that will inform a radical revision of what was earlier presented.
A harsh reality we must first contend with is that taxation projections over the last decade, which then informed the spending proposals, were each financial year hopelessly ambitious.
At this time of economic depression, it would amount to economic fraud to project increased tax revenue from the 2022-2023 fiscal year. We will thus reduce from the projections of last year by 25 per cent.
It follows, then, that it would be irresponsible to project increased spending, which must also be proportionally reduced from the previous budget.
Mr Speaker, Sir, we must drive the point home that we face a very serious risk of economic collapse, and all of us must make sacrifices so that we can steady the ship before imagining that there is money to splurge.
All this is in keeping with what was promised in the Kenya Kwanza manifesto, which stressed reduced spending, reduced borrowing and fiscal responsibility.
An Hon Member: Point of Order Mr Speaker, Sir! Is the Minister in order to …
Mr Speaker: Order, Hon Members, Order! The CS must be heard without interruption. Continue, Bwana Waziri.
CS Treasury: Thank you Mr Speaker, Sir. His Excellency the President is determined that we must remain faithful to the policies and principles enunciated in the Kenya Kwanza manifesto, and in that regard has indicated that he will lead by example in a national austerity campaign.
Mr Speaker Sir, His Excellency is aware that he leads a bloated government. To lead the way in reducing an unsustainable wage bill, he is agreeable to a 50 per cent cut in the budget allocated to State House.
The Executive Office of the President will be the first to be trimmed of all fat in both personnel, as well as projects and departments that serve no useful purpose other than to keep people on the payroll. The trimming will then be extended to all government ministries.
While the number of Cabinet Secretaries will remain as at present, the number of Principal Secretaries will be reduced to one per ministry, who will remain the overall accounting office. State Departments within each ministry will be headed by an Under-secretary.
The offices of Chief Administrative Secretary, some of them already styling themselves Assistant Cabinet Secretary, will be abolished.
(Applause)
The next step will be to slash the salaries of all senior public officers, from the President downwards, to rates that reflect our economic realities. Our President, Deputy President, Cabinet Secretaries, Members of Parliament, Judges, Principal Secretaries, County Governors and other senior public officers are amongst the highest paid in the world.
(Murmuring from the floor)
Mr Speaker: Order! Proceed, Proceed, Mr CS.
CS Treasury: Thank you. Mr Speaker, Sir, we earn the same, or more, than our counterparts in the biggest economies such as the United States, Germany, Japan, China, Russia, Qatar and Switzerland. At the same time, we resist wage increases for other salaried workers, citing a small and struggling economy.
Sitting allowances
This cannot be allowed to continue. Salaries of the aforementioned cadres will be cut by 50 per cent. In addition, Mr Speaker, Sir, as public servants, we are already on the public payroll. We earn salaries that we must live within, and which we will no longer be allowed to supplement with all manner of allowances simply for going to the office and doing our jobs.
We claim sitting allowances, standing allowances, responsibility allowances, commuter allowances, sleeping allowances, house allowances and all manner of other tax- free benefits that pad our pay packets.
(Loud murmuring and heckling)
An unidentified Member: No! No! Mr CS, we will impeach you! That is not what we were promised, that is not Kenya Kwanza agenda…
Mr Speaker: Order! Order, Hon Members! Who was that? That is completely out of order.
CS, Treasury: Mr Speaker Sir, we even get allowances to pay for nannies, cooks, gardeners, personal aides, security guards and all other manner of domestic and office help, but I can assure you that at least 80 per cent of that money goes straight into our own pockets.
Mr Speaker, Sir, we are concluding a comprehensive review of terms and conditions for senior public officers, which will also include abolishing extraneous allowances.
The ultimate intention is to cut waste in government, and also underline the principle that public service is a calling, a service, rather than an opportunity to amass wealth and to wield power and influence. In that regard, senior officers who rate a government vehicle and security will be limited to one saloon car, locally assembled, of no more than 1,800cc, and one driver-cum bodyguard. There will be no chase cars or extra guards unless there is an established security threat. Neither will policemen be deployed to residences or farms ... (Murmuring from the floor)
Mr Speaker: Order, Hon Members, Order!
Hon Members: Haki yetu! Haki yetu! Mandamano!
(A group of Honourable Members rush to the Table, grab the budget briefcase and wrestle the CS to the floor. Some of them grab the Mace and smash it on the Despatch Box. The House is Adjourned)
