Cabinet cuts spending to stem inflation
The Cabinet on Tuesday approved significant cuts in government expenditure, including official trips abroad and purchase of new vehicles, to contain the rising budget deficit.
A Cabinet meeting chaired by President Kibaki also resolved to fast track the formation of the Salaries and Remuneration Commission to deal with the increasing demands for better pay by public servants.
The austerity measures come at a time the government is grappling with serious economic problems including floods and famine in parts of the country as well as strike threats from teachers, nurses and air traffic controllers pushing for better salaries to meet the high cost of living.
The government is just emerging from a week-long strike by doctors working in government hospitals which almost paralysed the health sector. The doctors are demanding a 300 per cent pay rise as well as improved working conditions.
A dispatch from the Presidential Press Services (PPS) said the Cabinet had approved a raft of austerity measures to reduce government expenditure on non-essential areas.
Those to be cut include official travel overseas by government officials, the purchase of new vehicles and furniture.
Foreign trips for Cabinet ministers are a costly affair with a single trip to the US costing Sh53,820 ($598) a day in allowances while a visit to the United Kingdom burdens the tax payer with Sh63,090 ($701) a day.
Also to be reduced are budgets for hospitality, printing and advertising and other low priority government expenditure, the statement explained.
Economic environment
“The Cabinet also reviewed implementation of the current budget in view of the significantly changed economic environment,” the statement explained.
The Cabinet resolved to ensure the Salaries and Remuneration Commission is established in two weeks to deal with the current unrest in the public service.
This is the body mandated by the new Constitution to set and regularly review the salaries of public servants.
“Today’s (Tuesday) meeting also reviewed the salary requests by various public sector employees. The Cabinet reviewed the requests in the context of current budgetary constraints facing the country and ordered that such requests should be directed to the Salaries Remuneration Commission, in order to ensure harmony and sustainability of the Government and parastatals’ wage bill,” it said.
“The Cabinet noted that composition of the Salaries Review Commission should be completed in the next two weeks. In this regard the Cabinet said that individual ministries will now act as facilitators of submissions to the Salaries and Remuneration Commission,” it added.
Under the Constitution, the commission is supposed to ensure that the total public compensation Bill is fiscally sustainable.
The Cabinet also reviewed the current floods ravaging parts of Western, Nyanza and Rift Valley provinces and directed that its committee on disaster management puts in place all measures to ease the suffering of those affected.
The Cabinet committee was scheduled to meet later in the day under the chairmanship of Prime Minister Raila Odinga.
