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President is wrong as we elect MPs to watch over our taxes

Tuesday February 17 2009


President Kibaki has exercised his prerogative and refused to give assent to the Fiscal Management Bill passed by Parliament in December 2008.

The Bill was meant to give MPs a greater role in budget making. MPs had pleaded with the President to sign the Bill, saying this conforms with the new Standing Orders that require Parliament’s Budget Committee to participate in Budget making.

Chance to loot

And this, they say, will open up the hitherto opaque budget making process to parliamentary oversight and public scrutiny. Some commentators have lauded the President’s veto, arguing that our “greedy” MPs should not be given another chance to loot.

Others have read mischief in the President’s apparent violation of the Constitution by holding onto the Bill beyond the time allowed by law.

Seen against the government’s plans to float a Sh18.5 billion infrastructure bond on the domestic market, the President’s action could be interpreted to mean that he would wish the bond floated under the old regime where loans were not tied to specific projects, exposing the money to those with sticky fingers.

The President should have assented to the Bill because this is too important to be reduced to a political struggle between the Executive and the Legislature. This is a major constitutional development that moves us towards the ideal where we are governed by laws, not by men.

Legislative budgetary oversight and scrutiny is an important component in dealing with abuse and corruption. It improves government fiscal accountability as well as increases the “value for money” of government expenditures.

If Parliament is to be as significant as it ought to be, it should serve as a system of controlling the collection, allocation and spending of budgetary resources.

Strengthening legislative involvement in the process will enhance the role of the Legislature generally and help to create greater checks and balances in systems strongly dominated by the Executive.

The budget is not a mere accounting exercise; it is the government’s most important policy tool and the taxpayers’ main reason for demanding representation under the doctrine of No Taxation without Representation. Primarily, we elect MPs to watch over our taxes.

Budget allocations are about difficult (and even moral) choices, about trade-offs, about who gains and who loses in the collection and distribution of limited public financial resources.

Even more fundamentally, the budget is about people. It is about justice as the budget is the policy tool for advancing special interest issues.

Odious debts

Part of the budget process that is the most controversial and disappointing is our one trillion shillings public debt. If our public debt register was transparent, the odious debts that litter it would long ago have been ferreted out.

Right now the Government is planning to pay out two Sh270 million promissory notes for ghost projects. Come June 29, two other such notes worth Sh259 million will be due for payment.

Hence, with the ethical choices that the budget reflects, we need structural reforms which will remove the traditional secrecy around National Budget plans.