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{
"id": 245687,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/245687/?format=api",
"text_counter": 198,
"type": "speech",
"speaker_name": "Prof. Anyang'-Nyong'o",
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"speaker": {
"id": 193,
"legal_name": "Peter Anyang' Nyong'o",
"slug": "peter-nyongo"
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"content": "Mr. Deputy Speaker, Sir, I am however very disappointed contrary to Prof. Saitoti's 1694 PARLIAMENTARY DEBATES June 28, 2006 congratulations that you wrote your Budget within the framework of the economic recovery strategy. You have betrayed the economic recovery strategy. The Minister has betrayed the philosophy of the economic recovery strategy for wealth and employment creation because that strategy was based on the philosophy of broadening the tax base and reducing the tax rate. You have, on the contrary, increased the tax rate and not really really broadened the tax base and I will substantiate. Mr. Deputy Speaker, Sir, by making sugar farmers pay the Sugar Development Levy, you have actually taken the money away from those people who would create more wealth. You have also made more people pay Value Added Tax (VAT) because they have income in their pockets and they are about 3 million. You have, therefore, decided to enrich a handful of sugar importers and those in the business of selling sugar to us. You are, in other words, un`der-developing agriculture and rewarding mercantile capital, which is contrary to the development we need in an under-developed economy like ours. So, I would appeal to the young Minister to read carefully the Economic Recovery Strategy Paper (ERSP), which I authored and be faithful to the philosophy of that strategy that was based on broadening the tax base and reducing the tax rates. Secondly, the Minister decided to make people pay more for the petroleum levy by making tax collection simpler for the Kenya Revenue Authority (KRA). I understand the rationale of doing so because trying to collect road licence under the present circumstances is a much more complicated process than collecting money from the petrol tanks in filling stations. That efficiency gain will obviously be there, but the burden will then go to the consumer who is both the small and the big man. In the final analysis, the commuter who uses the matatus will end up paying more money for boarding the matatus and, therefore, taking out of his pocket money that he could have used as savings or invested in small and medium enterprises, as the case may be. The Minister should look at that move very carefully and find out whether he is broadening the tax base and reducing the tax rate or he is doing the opposite. Mr. Deputy Speaker, Sir, one thing I thought the Minister could do to help Kenyans was to remove stamp duty for first-time home owners. As you know, the real estate business is booming in Kenya, particularly in Nairobi, and it is one of the major factors contributing to the high rate of economic growth, as we had expected when we wrote the ERSP for Wealth and Employment Creation. Nonetheless, the real estate boom that we are seeing in Nairobi and other towns is mainly in the up market section, the upper middle class and above. We are not seeing a real estate boom for the poor and the low income earners. We are not seeing a real estate boom which will make it possible for your son - you are too young to have a son who can buy a house, but I have one -to buy a house as a first-time home owner. Were we to give incentives to first-time home owners, we would abolish the stamp duty for first-time home owners so that they can own homes. Secondly, we could give incentives to low income housing so that we can see houses costing Kshs500,000 or less being developed in both urban and rural areas so that we can have more owners of houses of the lower income group. In this regard, the Minister will make it possible for real poverty reduction where it makes a lot of meaning; that is, among the poor and the lower income groups. This Budget, however, is still rewarding the haves in terms of increasing income and getting on with life than those who are at the bottom of the economic scale. Mr. Deputy Speaker, Sir, figures about economic growth are per capita figures. In other words they are averages that assume that the wealth that is being made when divided by the population, you can tell the economic health of the nation. However, quite often, when wealth is skewed towards the top 10 per cent or 20 per cent, figures of economic growth do not give good indications as to how successfully we are fighting poverty. When you have high economic growth, the Government must intervene with an income distribution policy that will help lower income earners. I am afraid that in this particular Budget, I do not see a very progressive income June 28, 2006 PARLIAMENTARY DEBATES 1695 distribution policy affecting rural areas except the traditional one. The traditional one means that what we have done is to guarantee markets for cash crop producers, but not lift the 50 per cent who are below the poverty line to enter the market. I would have said that were we to do this today, the Government would have had a Budget which would have a radical intervention in agriculture. As the Millenium Development Goals (MDG) Experiment in Barsauri shows, which my Ministry initiated when I was there, if you can have fertilizers as a typical input in agriculture and hybrid seeds that farmers use, productivity in agriculture will go up ten-fold. However, this requires a radical intervention by the Government to support agricultural productivity through subsidy of fertilizers and hybrid seeds for rural farmers. I hope that this is a policy that the Minister should take very seriously if, indeed, the tax gains we will have as a result, a more efficient collection of the petroleum levy which is directed towards agriculture rather than consumed by the State in Ministries which are traditional consumers of public revenue and wasting it like the Ministry of Defence and the Office of the President. Mr. Deputy Speaker, Sir, I was very disappointed that the Ministry of Defence had a higher Budget than the Ministry of Health, recognising the size of the Ministry of Defence and the size of the Ministry of Health. I am comparing the two. What the soldiers do is to sit in their camps and polish their boots. What the nurses and doctors do on the other hand is to treat the sick and restore life. If you look at those figures in terms of per capita distribution of the Budget, there is a higher per capita distribution of that Budget in the Ministry of Defence than in the Ministry of Health. I would have thought that compared to the value the doctors and nurses add to the economy of Kenya, we should have reduced the Budget for the Ministry of Defence by half, and taken that money to the Ministry of Health. In Kisumu, for example, you have one nurse to 60 patients. I would say, you have one nurse to one million mosquitoes as well. If you visit Nyanza Provincial General Hospital, that hospital does not even have facilities to prevent mosquitoes from biting the patients in the amenity wards. I would think that if we could put some resources in up grading our hospitals rather than put resources in up grading housing for those who are just polishing their boots in the army camps, we would do better service to the people of Kenya and using our revenues more rationally than we are doing at the moment. The accolade being given to the Minister for having written a good Budget is precisely because some hon. Members do not read between the lines, and do not do the correct arithmetic to understand the shortages and short comings in the young Ministers Budget---"
}