News

Judge stops budget cuts to avert court shutdown

treasury

National Treasury building in Nairobi. FILE PHOTO | NMG

Summary

  • A judge Tuesday stopped the Treasury from pushing for the implementation of spending cuts at the Judiciary to avert a shutdown of courts.
  • The order threw into chaos plans to review the national Budget in an economy where taxes are trailing targets.
  • The Treasury had sought to cut the Judiciary’s budget by Sh3 billion last month, citing revenue shortfalls.

A judge Tuesday stopped the Treasury from pushing for the implementation of spending cuts at the Judiciary to avert a shutdown of courts. The order threw into chaos plans to review the national Budget in an economy where taxes are trailing targets.

The Treasury had sought to cut the Judiciary’s budget by Sh3 billion last month, citing revenue shortfalls.

Justice Makau Mutua issued the order in a case in which the Law Society of Kenya has sued the National Treasury and the Attorney-General over the Judiciary budget cuts. More than 15,000 cases were suspended after dozens of courts around the country shut due to the budget cuts.

Budget cuts were to be implemented in all State departments and agencies with non-essential items like trips, training, purchase of cars, renting offices and buying of furniture being affected.

The Treasury had on September 25 asked ministries and State agencies to review their budgets in line with austerity measures and allow for preparation of a Supplementary Budget for MPs’ approval, drawing protests from the Judiciary.

courts got a reprieve after Justice Makau temporarily stopped the Treasury from implementing the Judiciary budget cuts and asked the Judicial Service Commission to provide a report on how the austerity measures would affect the administration of justice.

“Pending the hearing and determination of this case, an inductive order be and is hereby issued restraining the National Treasury, it’s agents, officers or any persons, from implementing a circular dated September 24 or issuing any unwarranted directive with the same effect on the Judiciary’s budget,” the judge said.

The cuts will accompany a freeze in both hiring and pay increases as well restrictions on new development projects, which will now require the Treasury’s approval.

The Treasury did not reveal how much it intends to save from the actions. However, it singled out overseas trips by government officials — which often involve hefty travel allowances and large entourages — and hospitality or entertainment spend by government departments — as examples of wasteful spending.

The Treasury’s order prompted the Chief Registrar of the Judiciary to issue a staff memo on October 9 on the need for review of budgets and a freeze of some plans. Tribunal sittings, including those for environment, rent and aviation disputes, were also suspended as more than 15,000 cases faced suspension following the Budget wrangles with the Treasury.

LSK told the court that the budget cuts would greatly interfere with the independence of the Judiciary and the delivery of justice to Kenyans.

Justice Makau directed that the case be mentioned on November 6 for further directions.

The Treasury and President Uhuru Kenyatta have with little success repeatedly pushed for cuts on non-essential government spending. The latest directive is a product of funding gaps following below-budget revenue performance due to the slower economic activity that left the Kenya Revenue Authority with a Sh91 billion tax hole in the year to June. This has prompted increased borrowing.

Critics have accused the government of ramping up borrowing at a rate that will saddle both the current as well as future generations with way too much debt. Already, more than half of all tax collections are used to pay off debts.

However, the government has defended the increased borrowing, saying the country must invest in its infrastructure, including roads and railways.