Can we afford the teachers’ pay rise? Yes we can!

Can we afford to pay teachers the 50 per cent to 60 per cent increment as ordered by the Supreme Court?

The government, through the cabinet secretaries for Education and the Treasury, has said that it does not have the money and that, even if it did, it would have to get authority from Parliament since the budget process has already been concluded.

 I am not satisfied by that answer.

According to the Teachers Service Commission (TSC), the increment will raise the monthly payroll by about Sh1.4 billion, or Sh17 billion annually. I agree; Sh17 billion is a lot of money — if you gave it to me, I would stop charging for my services and work free of charge for the rest of my life!

That’s just me, but is Sh17bn a lot of money to our government? In the 2015/2016 budget, the government plans to spend about Sh2.1 trillion on various activities.

 For someone planning to spend this kind of money in a year, Sh17 billion is just but a drop in the ocean — it is only 0.8 per cent!

Suppose you have a household budget of Sh21,000 per month and then the cost of one of the items you buy regularly went up by Sh170; how would that affect your finances? Would you be able to cope with that increase?

SAME EFFECT

That’s the same effect that Sh17 billion has on the National Treasury. I believe you can easily make some savings here and there to cover the extra Sh170 — perhaps skip one beer during the month! The (highly paid) experts at the National Treasury should also be able to do the same.

Furthermore, in 2015/2016, the TSC proposed to spend about Sh188 billion on teachers’ salaries. An additional Sh17 billion  is about 9 per cent of this budget. I believe that with prudent management (for example, pruning ghosts out of the payroll), the TSC can also find the extra Sh17bn without having to go back to the National Treasury.

I am also surprised that this Sh17 billion increment was not captured as a contingent liability in the budget, given that the salary dispute was already in court at the beginning of the year. It was extremely naive to expect that the only possible outcome was a win for TSC!

A few years ago, East African Breweries was sued by one their major distributors for breach of contract.

 The distributor demanded Sh240 million compensation. For the years that the matter was in court, the company carried this amount as a contingent liability in its books.

 That’s what prudent financial managers do because you cannot know which way the court will rule. I cannot understand why TSC did not do the same.

In the end, I know that the teachers will get their pay rise, so the big question in my mind is: why do we have to keep children out of school for weeks yet we will have to pay?