Tuesday, 11 March 2014

ODM's Position on the Wage Bill

 The populist move by the President and the Deputy President to cut their salaries by 20 per cent and that of Cabinet and Principal Secretaries by 10 per cent is not convincing.

These cuts will not in the least affect the standards of living of these people. The president pays no bills, buys no air time or fuel nor does he have to pay rent or bus fare. The same is true with the Deputy President.

The allowances and other perks the Cabinet Secretaries get will more than compensate for the salary cuts they have taken. Ordinary civil servants are not therefore in the same league.

What Kenya needs is a national incomes policy and not a populist cut of salaries. The government needs to lead a national discussion of TAXATION in relation to WAGES at all levels. In the meantime, we recommend the government takes the following steps:
Accept Devolution and stop duplication.

The entire structure of Provincial Administration that was to be phased out with the coming of the constitution of 2010 has been renamed and retained in the form of regional commissioners, county commissioners, district commissioners and a chain of administrators running past the chefs.

This system is running parallel to the constitutionally sanctioned system of county governments headed by the governor. The source of the money remains constant; the Kenyan tax payer. The Jubilee government could save Kenyans the pain of higher taxes, higher cost of living and anxiety over job cuts by simply accepting the reality of devolution and fitting the provincial administration into devolved units instead of running a parallel system then asking where all the money is going.

Cut down on corruption:

It is clear that the big time corruption cartels whose hold onto Kenya we cut short in 2002 are back, trying to make up for lost time. Corruption is eating into government coffers, paying ghost workers and paying for services not rendered or way above market rates. It is ironical that the battle on wages is now rated much more urgent by the Jubilee government than the war against corruption. The Jubilee government has now resolved to pay the so-called Anglo-Leasing debts, an outright conduit for corrupt deals.

Cut luxury expenditure:

Jubilee should enforce Treasury's ban on five-star venues for government meetings, which it defied only last week. The government should ban foreign locations for conferences, exhibitions and keep the size of delegations and entourage locally and abroad at an absolute minimum. But this is easier said than done.

Put Kenyans back to work:

There is need for a clear road map on what needs to be done to put millions of Kenyans to work and encourage companies to hire and not fire people. The government needs to come up with a plan to reward firms that hire more Kenyans and those that increase workers’ pay.

Support Small enterprises:

Jubilee must use its numerical strength in the National Assembly to come up with administrative, regulatory and legislative measures to help small firms start and expand. The cost of bank loans remains unbelievably high after so much rhetoric about it. The subject of interest rates is touchy because a number of senior government officials also have interests in the banking industry.

But if we are to create job creators and not job seekers, the cost of loans have to fall. The government must embrace and engage small contractors and change the way it does business with small firms. Startups cannot wait for months and years chasing their payment vouchers. A simpler engagement would help turn Kenyans into job creators, not job seekers. Small businesses are the engine of that job growth, and essential to the continued economic recovery.
Embrace, don’t fight security sector reforms:

This may seem to have nothing to do with wage bill, but the reason the economy is stagnating is uncertainty about security. Reforming our security sector radically and equipping it with skills, knowledge and tools fit for new challenges will go a long way in giving confidence to investors and helping the economy grow.

March 10, 2014.