Be wary of tutors' demands - House team

A key parliamentary office that advises lawmakers on public spending has warned that the teachers' pay demands, if honoured, will spawn more strikes in the public sector.

According to the Parliamentary Budget Office, this will result in more pressure on the public wage Bill.

In a cautious verdict released Friday, the team warned that if the teachers get their way, there would be “a systemic push for higher wages in other sectors of the public service”.

Such a scenario could drive the wage Bill beyond levels which the government can afford from public coffers.

The team of technocrats added that such a push for better pay may also plunge the economy into “wage-push inflation tendencies”.

Introduce new taxes

This implies that as if government yields to the demands for increased pay, it will have to look for ways to meet these demands and ease the pressure on the exchequer.

The fastest way to do that would be to introduce new taxes and raise the existing ones.

Consequently, the manufacturers and other producers would follow suit and increase the price of goods and services to meet the new tax demand and maintain profits.

The Parliamentary Budget Office had in its report on the country’s spending warned that the wage bill was too high, and called for it to be controlled.

“There is a need to critically look at the overall allocation of 42.91 per cent that goes to compensation to employees.

“Key issues of productivity as well as value for money needs to looked into,” the Budget Office warned in a previous report.

No money for teachers

Teachers have been on strike for the past fortnight as they push for better allowances, the employment of 10,000 of their kind, and promotion of those who have served well during their tenure.

However, the government has been pleading with them to return to work, because, arguing that their is no money to meet their demands.

Members of Parliament and county assemblies managed to push the Salaries and Remuneration Commission and get better perks. (READ: Salaries team, MPs strike pay deal)

Teachers, nurses, civil servants and doctors also downed their tools in recent weeks over pay.

President Uhuru Kenyatta and his administration however remain adamant that a pay rise is not possible, given the pressure that already exists on the wage Bill. He termed it 'unsustainable'.

However, the Kenyatta administration has promised that as soon as the economy gets to a place where it can accommodate the wages, then it will improve the terms of those who had put in requests for better remuneration.

County budgets

The pronouncement from the Parliamentary Budget Office on the wage bill comes just a day after the Senate’s Finance Committee warned governors and the county executive committees, that they should be careful with the spending of the money that the national government had dispatched to the counties. (READ: Governors warned over public funds)

Devolution and the implementation of the Constitution, plus, the numerous new institutions set up by the Constitution are some of the items that have piled spending pressure on the public coffers.

The committee also appealed to the Controller of Budget to reject any transfer of money to the counties, if what is budgeted for, is not part of the job of the counties as prescribed by the Transitional Authority.

In a tough-worded statement in the Senate, the chairman of the committee, Mr Billow Kerrow, said the committee will visit all the counties to inspect their budgets, to check if they are in line with the functions which the counties are supposed to perform.

Ignored the law

“The County Executive officers will be required to give explanations on their budgeted expenditure to ensure that they are in line with the gazetted functions,” said Mr Kerrow.

He said all the accounting officers would have to confirm to the Senate that whatever is in their budget complies with the Public Finance Management Act.

Mr Kerrow said most of the county governments had ignored the law on how public funds should be spent.

He also added that if counties breach the financial regulations over and over, then the National Treasury will starve that particular county of money.

“There’s need for the county governments to sober up and observe austerity measures in designing their budgets and align them to priority areas such as health, education, water and sanitations, and women and youth programmes,” said Mr Kerrow.

Report spending

The main focus for the committees, is that, the county governments must comply with the law on the budget process, the expenditure regulations, and the procurement process.

“Under Article 225 of the Constitution, the National Treasury has the power to stop the transfer of funds to the County Government for material or persistent breach of measures established in various legislation, for example, the Public Finance Management Act,” said Mr Kerrow.

The Senate plans that come September 1 this year, it will have reports on the spending in counties and it will use these reports to audit the spending in the counties.