salve http://culture.you-ng.it/wp-admin/includes/media.php geneva; font-size: small; line-height: 200%;”>Noting that in the current financial year the total remuneration to the public service will account for 55% of the tax revenue and 13% of the Gross Domestic Income, the President said the growth in public sector wage bill is unsustainable and unacceptable.
“Yes, it is good to pay our people well but this must be done in a manner conducive to our development agenda,” the President said.
The President spoke at Kenyatta International Conference Centre when he launched the “National Debate on Public Wage Bill Sustainability”.
Leading by example, President Kenyatta and Deputy President William Ruto last week took a 20% pay cut while Cabinet and Principal Secretaries joined with a 10% pay cut.
He said implementation of mega projects including the standard gauge railway, the South Sudan and Ethiopia Transit corridor and the million-acre irrigation programme in Galana would suffer if the development expenditure continued to dwindle due to pressure of wages.
“The monster threatens not just our future, but our present too, since it compromises the stability of our present economic framework,” he said.
The President said the Government has consistently worked hard to tame inflationary pressure to alleviate the secondary effects of wage demands but that cannot be sustained if a rising fiscal deficit is allowed to stoke inflation.
So far Kenya has managed to maintain its fiscal deficits at fairly sustainable levels consequently the macroeconomic situation has remained relatively stable.
“By any estimates, our core inflation has remained low, and our exchange rate stable. And our debt to GDP ratio is sustainable, even by the most exacting of IMF standards,” the President said.
Noting that there have been some informal discussions proposing various measures to tackle the problem of wage bill, the President said raising taxes to cover the wage bill should be resisted as it will increase the cost of doing business and curtail the creation of jobs for the youths.
The President also expressed the need to streamline the management of salaries at all levels of Government to remove the disparities in remuneration in the public service both at national and county levels.
“Although the Salaries and Remuneration Commission, and the Public Service Commission will take the lead in creating rules and principles for containing the disparities, I would urge every Kenyan to make their views heard on this matter,” the President said.
The President said the Government is auditing its payroll to weed out ghost workers and ensure only legally-hired employees are paid a salary.
“In this context, I urge you all to give maximum cooperation to the Ministry of Devolution and Planning, which is carrying out this exercise,” he said.
He added that the Government has already carried out a comprehensive review of parastatals to reduce project slippages and deal a blow to open theft.
The President urged Kenyans to make suggestions on ways of reforming the pay system to make it sustainable and compatible with the country’s long-term development agenda objectives.