By Morris Aron
Has Njeru Githae’s Sh1.4 trillion Budget ignored the immediate needs of the majority in favour of popular politics?
Besides, is the incremental approach to budget size adopted by every Finance minister good for the economy in the long run?
Uhuru Kenyatta ushered in the era of trillion shilling budget. And since then, there has been no turning back, with successive finance ministers looking to break this record.
But analysts say that expansion of the fiscal policy, while tax collection remains stagnant is not sustainable in the long run.
Hope now lies with tax regime reforms, which seeks to broaden the tax bracket.
These are the questions in many analysts’ minds after parliamentary budget committee tabled its report for debate.
abandoned projects
According to the report by the Parliamentary Budget Committee, headed by Elias Mbau, the widening gap between the budget policy statement and the printed estimates indicate that technocrats at Treasury have abandoned short, medium and long-term projects in favour of political expediency.
“It is not clear why the fiscal framework has changed significantly and if the budget policy statement actually is in touch with the 2012/13 Budget,” notes the report.
“The estimates contained in the budget policy statement, the vision 2030 and strategic plans for various ministries shows indicates the ‘business as usual’ approach to budgeting remains deeply entrenched in the executive.”
The report indicates that there is a Sh197 billion difference between the budget policy statement and the printed estimates.
In essence, the wider the difference between the budget policy statement and the printed estimates signals the level of deviation from laid down policies that have been put in place to push Kenya to a middle-income country in a few years.
The committee, which is mandated to collect information and views of members of the public, in as far as budget making is concerned, has proposed a number of changes to the budget.
spending caps
For starters, it proposes the introduction of several spending caps and a myriad of austerity measures. If approved, the committee hopes to slash Sh19.6 billion off the Budget, and and re-allocate money to various ministries.
“With limited tax revenues, there is need for cost cutting to get the Government working,” said Nikhil Hira.
“In addition, several key tax reforms are yet to be done as had been earlier proposed.”
Key among the recommendations includes a proposal loss making should not be funded by taxpayers’ money. Such a move will see the government save Sh600 billion a year.
The report is also recommending a cut in the recurrent expenditures in ministries, a slash in the foreign travel, hospitality and supplies. The report is promising a cut in the amounts allocated for domestic and foreign travels, expenditures for maintenance, operating expenses, printing, purchase of vehicles and equipment, construction of buildings, hospitality supplies, among others.
