JSS interns, suppliers and MPs major losers in Treasury’s spending cuts

Cabinet Secretary, National Treasury & Economic Planning, Njuguna Ndung'u.  

Photo credit: File | Dennis Onsongo | Nation Media Group

The government has deferred plans to convert the employment terms for 46,000 Junior Secondary School (JSS) interns into permanent and pensionable as the Treasury rationalised the budget after a parliamentary committee dropped some contentious clauses in the Finance Bill.

Part of the fallback plan should the National Assembly not ratify Treasury’s revenue-raising measures for the fiscal year starting July, the National Government-Constituency Development Fund (NG-CDF) will also lose Sh15 billion, a major blow for legislators who rely on the kitty to showcase their performance. 

The rationalisation, the Cabinet Secretary for National Treasury Njuguna Ndung'u said, is aimed at curing that revenue shortfall that might result from the changes to the Finance Bill 2024 proposed by the Parliamentary Committee on Finance and National Planning.

Should legislators adopt the changes proposed by the committee, which is led by Molo MP Kimani Kuria, Prof Ndung'u anticipates a shortfall of Sh200 billion, which the Treasury has to address through spending cuts.

The Treasury has proposed to slash Sh18.9 billion from the Teachers Service Commission (TSC), which would be used to hire JSS teachers.

Prof Ndung'u was responding to a letter from the National Assembly clerk Samuel Njoroge seeking advice on the various options that will enable the National Assembly to balance between the expected revenues and the total expenditures in light of the changes proposed by the committee of Finance and National Planning.

“We note that Section 39 (4) of the PFMA [Public Finance Management Act], 2012 Cap. 412A requires that any increase in expenditure in a proposed appropriation is balanced by a reduction in expenditure in another proposed appropriation,” said the CS.

“We further note that following the ongoing debate on the Finance Bill 2024, should the Finance Bill 2024 be approved by the National Treasury, the National Assembly can proceed with the consideration of the Appropriations Bill as published,” said Pof Ndung'u.

Allocation to the last mile electricity connectivity for constituencies, including metering which had been allocated Sh14.5 billion has been deferred, while the last mile connectivity has lost Sh4.57 billion making the total budget cut for the State Department for Energy to Sh21.77 billion.

Completion of ongoing road projects will have to wait further should the legislators agree with the changes proposed by the Kimani Kuria-led committee with the Treasury slashing Sh15.1 billion.

Payment of pending bills has also been reduced by Sh5 billion, Kenya Revenue Authority (Sh4.7 billion), while Kenya Airways, Civil Servants Insurance Scheme and Equalisation Fund arrears losing Sh1 billion each.

The various water projects will lose Sh11.6 billion, irrigation projects (Sh3.7 billion), and Galana Kulalu (Sh1 billion).

The county's share of the shareable revenue will lose Sh5 billion, fertiliser subsidy (Sh5 billion) and sugar reforms to farmers (Sh1.7 billion).

The ICT Authority will lose Sh6.7 billion while the State Department for Medical Services will lose Sh4.7 billion.

The cuts are informed by changes to the Finance Bill in which the 2.5 percent motor vehicle tax was dropped, excise duty on mobile transfer fees retained at 15 percent instead of 20 percent, while eco levy was restricted to imported finished products. 

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Note: The results are not exact but very close to the actual.