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"id": 37097,
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"legal_name": "Elias Peter Mbau",
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"content": "Thank you, Mr. Temporary Deputy Speaker, Sir, for your guidance. Mr. Temporary Deputy Speaker, Sir, I beg to move the following Motion:- THAT, this House adopts the Budget Committee Report on the Estimates of Revenue and Expenditure for 2011/2012 laid on the Table of the House on Thursday, July 21, 2011. Mr. Temporary Deputy Speaker, Sir, in moving the Motion, I wish to note that the Members that comprise the Budget Committee include:- 1. The hon. Elias P. Mbau, Chairperson 2. The hon. Alfred Wekesa Sambu, Vice-Chairperson 3. The hon. Martin Ogindo. 4. The hon. Danson Mungatana. 5. The hon. Moses Lessonet. 6. The hon. Omar Zonga. 7. The hon. John Mbadi. 8. The hon. Nemesyus Warugongo. 9. The hon. Sheikh Dor. 10. The hon. John Mututho. 11. The hon. Nelson Gaichuhie. 12. The hon. Emilio Kathuri. 13. The hon. Abdi Bahari. 14. The hon. Johnson Muthama. 15. The hon. Jackson Kiptanui Mr. Temporary Deputy Speaker, Sir, I also need, in addition, to notify you that the above Members are also enjoined by the following Chairpersons of Departmental Committees who are ex-officio Members of the Budget Committee:- 1. The hon. (Eng) James Rege, Chairperson, Committee on Energy, Information and Communications. 2. The hon. David Koech, Chairperson, Committee on Education, Science and Technology. 3. The hon. Mutava Musyimi, Chairperson, Committee on Lands and Natural Resources, 4. The hon. John Mututho, Chairperson, Committee on Agriculture, Livestock and Co-operatives. 5. The hon. Robert Monda, Chairperson, Committee on Health. 6. The hon. David Were, Chairperson, Committee on Transport, Public Works and Housing. 7. The hon. Aden Keynan, Chairperson, Committee on Defence and Foreign Relations. 8. The hon. Fred Kapondi, Chairperson, Committee on Administration and National Security. 9. The hon. Chris Okemo, Chairperson, Committee on Finance, Planning and Trade. 10. The hon. Sophia Abdi Noor, Chairperson, Committee on Labour and Social Welfare. 11. The hon. Mohamed Gabbow, Chairperson, Committee on Local Authorities. 12. The hon. Ababu Namwamba, Chairperson, Committee ion Justice and Legal Affairs. 13. The hon. (Dr.) Julius Kones, Acting Chairperson, Public Accounts Committee. 14. The hon. Mithika Linturi, Chairperson, Public Investments Committee. 15. The hon. Thomas Mwadeghu, Chairperson, Local Authorities and Funds Accounts Committee. 16. The hon. Ekwe Ethuro, Chairperson, Committee on Constituencies Funds. 17. The hon. Mohamed Abdikadir, Chairperson, Constitutional Implementation Oversight Committee. Mr. Temporary Deputy Speaker, Sir, the mandate of the Members of the above Committee is established under Standing Order No.190. It is mandated to:- (a) Examine the Budget Policy Statement presented to the House and shall report to the House what, if any, economies should be made consistent with the proper carrying into effect of the policies implied in or by such Statement and the Estimates. (b) Evaluate tax estimates, economic and budgetary policies and programmes with direct budgetary outlays. Mr. Temporary Deputy Speaker, Sir, the Budget Committee is further given legal backing under the Fiscal Management Act, 2009, and the Constitution, Article 221, Subsection 4 and 5. It is important to underscore that the new Constitution has given Parliament a more expanded role in the Budget making process, because it has changed the role of Parliament from a Budget approving institution to a Budget making institution. Indeed, the enhanced responsibility includes the ability to decide on resource mobilization, allocation, monitoring and control. Mr. Temporary Deputy Speaker, Sir, pursuant to Article 221, Subsection 4 of the Constitution, the National Assembly will only consider the Estimates of Revenue and Expenditure after a relevant Committee, in this case, the Budget Committee, discusses and reviews the Estimates and makes recommendations to the National Assembly. This is what we have been doing. Mr. Temporary Deputy Speaker, Sir, I want to move on and inform the House of what we have done in reviewing the 2011/2012 Budget Estimates. The Committee has held public hearings with organized groups and the general public in line with Article 221, Subsection 5 of the Constitution. The public hearings were held in Nairobi, Mombasa, Kisumu, Embu, Nakuru, Nyeri, Garissa and Kakamega. Further, the Committee also received written submissions from all the 12 Departmental Committees, which it considered and are annexed to this Report. Other written submissions were also received from organized groups, civil society, organizations including former Parliamentarians Association of Kenya and members of the public, among others. I want to acknowledge that the Committee is grateful to the Office of the Speaker and the Office of the Clerk of the National Assembly for the support received as it discharged its mandate of reviewing the 2011/2012 Budget Statement and Estimates of Expenditure and Revenue. The Committee is also grateful to the Members of Parliament who participated in the process, especially the public hearings in all the eight centres named above. The Committee also appreciates the very positive contributions by stakeholders, public, organized groups who appeared before the Committee and its Members, as well as those who made submissions during the hearings. The Committee is also grateful to the Office of the Deputy Prime Minister and Minister for Finance, other Ministries, heads of departments and Government agencies who appeared before the Committee and the relevant Departmental Committees. Let me also extend gratitude to the Provincial Administration across the country that helped in the co-ordination and mobilization of the people during the Budget public hearings. Mr. Temporary Deputy Speaker, Sir, it is, therefore, my pleasant duty and privilege as well, on behalf of the Budget Committee, to expound on the various findings and recommendations, as is expected of this Committee, that we have been able to come up with, which we wish to be revealed, debated and eventually adopted by this House. In highlighting the various issues that have been discussed, we note that the first one related to the need to discover whether the Budget proposals were linked to the 2011 Budget Policy Statement Report and resolutions that were discussed by this House as well as adopted. Mr. Temporary Deputy Speaker, Sir, I want to say that the Committee was able to find the following:- That, it is important to note that in this Financial Year, 2011/2012, the Budget has been prepared against the backdrop of several challenges arising from external as well as internal shocks. From the external front, the political instability in the oil producing countries, the Japanese earthquake, the debt crisis in Europe and piracy in the Indian Ocean have all resulted in unfavourable climate and soaring prices of imports. On the domestic scene, the prevailing drought and famine, together with inflationary pressures and high foreign exchange rates have also driven the cost of living for ordinary Kenyans to unaffordable levels. Mr. Temporary Deputy Speaker, Sir, it is against the afore-mentioned operating environment that the Minister expects to collect a total revenue amounting to Kshs789.53 billion, which includes Kshs713.62 billion of ordinary revenues and Kshs75.91 billion of Appropriations-in-Aid. One of the key recommendations that we had made in the Report on the Budget Policy Statement was for the Minister to urgently review all the Appropriations-in-Aid items and identify them so that they can be turned into ordinary revenue to increase efficiency and accountability. To this end, the Committee notes with commendation that the Minister, indeed, has been able to turn A-in-A worth KshsKshs9.2 billion into ordinary revenue. However, the Committee wishes to encourage the Minister to institute further measures, including fully automating all Government institutions that collect revenue, which include hospitals, local authorities, land registries, public universities and judicial registries, among others. The Committee also considers the above recommendations very important and has already asked the relevant Committee on Energy Information and Communications to take the lead in ensuring that the proposed computerization is achieved to ensure that all loopholes are sealed and revenues are duly collected for the economic development of our country. Mr. Temporary Deputy Speaker, Sir, you may recall that one of the recommendations in the Report of the Budget Policy Statement (BPS) was to limit total expenditures, including net lending at 30 per cent of GDP by cutting the non-essential expenditures of Government. This recommendation was in line with the need to reduce public debt to the internationally admissible level of 42 per cent of the GDP over the Medium Term. However, a review of the proposed expenditure for the year 2011/2012 indicates that expenditures, including net lending, is poised to stand at 33.5 per cent of the GDP. This means that the gap between expenditure of revenues has widened further and this may lead to an increase in domestic borrowing with the obtaining effect of locking out local investors. The Committee’s view is that the proposed estimates may become unsustainable. We further note, as a Committee, that the 5.7 per cent growth of GDP focus for the Financial Year 2011/2012 as presented in the Minister’s Statement seemed rather ambitious. Independent forecast by the Parliamentary Budget Office puts the growth forecast at 5.1 per cent. The World Bank, in its recent Report, further forecasts Kenya’s growth for 2011 at about 4.9 per cent. The IMF, in a recent Report, indicated that Kenya will achieve broad based growth in 2011 only if various risks such as inflationary pressures and drought are strategically mitigated. The Committee is of the view that there are no sufficient mitigation measures to warrant the Government’s optimistic view of 5.7 per cent growth rate. The public out there are suffering due to high inflation rates. When they shout “unga” and run in the streets, they are not mad, neither are they people disrupting peace. They are going through difficult times and yet, as a leadership, we seem to have nothing to offer them. Hon. Members, the current inflation is largely due to food and transport component as indicated by the numbers from the Kenya National Bureau of Statistics in June 2011. The items; food and transport component, recorded an inflation of 22.52 per cent and 22.71 per cent, respectively. It is important that the Government institutes firm measures to deal with the food shortage and the oil crisis before the situation gets out of hand. Mr. Temporary Deputy Speaker, Sir, you may also recall that one of the recommendations of the Report of the Budget Policy Statement was to limit the ceiling of the Parliamentary Service Commission to Kshs6.5 billion and Kshs2.4 billion in Recurrent and Development expenditure, respectively. In the proposed Estimates that we have scrutinized, the Minister has allocated Parliamentary Service Commission Kshs6.496 in the Recurrent Expenditure and Kshs1.6 billion in Development Expenditure. This implies that the allocation in the Development Expenditure was below the Budget Policy Statement recommendations by Kshs800 million. Therefore, this recommendation was not adhered to by the Ministry of Finance. It was further recommended that pursuant to Article 241 of the Constitution, the budget for the Ministry of State for Defence be separated to reflect allocations to each of the three arms of the defence forces and general administration. However, a look at the estimates of the expenditure indicates that, that also was not done. Those are a few areas that the Government, in presenting its estimates of revenue expenditure, was unable to comply with the resolution of this House as contained in the BPS. We also have some further key issues on the revenue side of the Budget that I would like to be considered, debated and adopted. (a) Under the overall revenue forecasting and setting of targets, the Committee is very concerned by the revenue under-performance in recent times. In the just ended Financial Year, 2010/2011, the Kenya Revenue Authority (KRA) realized a collection of Kshs634.9 billion against the original target of Kshs645 billion, representing an under- performance of Kshs10.1 billion. That trend is worrying given that the KRA also missed its target by over Kshs14 billion in the 2009/2010 Financial Year. However, hon. Members are aware that it was reported that the KRA had over-performed on a revised target that had been agreed upon between themselves and the Treasury. The Committee is concerned that such targets are agreed upon without due reference to Parliament. Therefore, the Committee recommends that the National Assembly resolves that, in future, any revenue target revision must be agreed upon by Parliament to avoid misleading the country."
}