House seeks more time to consider budget proposal
An MP is pushing for amendments to the law to give the National Assembly more time to scrutinise the Budget Policy Statement (BPS) before it is adopted by the House.
The proposed amendment to the Public Finance Management (PFM) Act by Ms Gladys Boss, the Uasin Gishu County Woman Representative, wants the period MPs are required to consider and approve the BPS increased from 14 days to 21 days.
The Bill seeks to implement the resolutions made by the 12th Parliament in its approval of the 5th report of the Procedure and House Rules Committee on the amendments to Standing Orders.
“The object of this Bill is to amend the PFM Act to increase the period for consideration of the BPS to allow for comprehensive scrutiny of the proposals contained in the statement,” the Public Finance Management Bill 2022, reads.
The Bill has already been introduced in the National Assembly.
BPS is a government document prepared by the National Treasury, setting broad strategic priorities and policy goals that will guide the national and county governments in preparing their budgets for the following financial year and over the medium term.
The PFM Act provides that the National Treasury submits BPS to the National Assembly not later than 15th of February every financial year, for consideration and approval.
This means that the 2023 BPS must be submitted to the House by February 15, 2023 to start the budget-making process for the 2023/24 financial year.
Ms Boss’ proposed amendment is coming after the MPs in the 12th parliament engaged in a bitter exchange over whether the report of the Budget and Appropriations Committee (BAC) on the 2022 BPS or the BPS itself can be amended.
At the time, the House was debating the 2022 BPS and because of the limited time within which to consider the statement, they complained that they did not have enough time to scrutinise the document.
The debate on the 2022 BPS that led to the current financial year's budget would later be postponed by the then Speaker Justin Muturi ostensibly to pave the way for consultations with the National Treasury.
The need for consultations was triggered after BAC recommended that the expenditure ceiling of the national executive be slashed by Sh400 billion from Sh2.017 trillion as had been proposed in the 2022 BPS document.
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The BPS document had projected an expenditure of Sh3.33 trillion for the country in the 2022/23 financial year but with a whooping Sh846 billion deficit, which BAC warned that if passed as originally published, would be akin to violating the then Sh9 trillion debt ceiling enacted in November 2018.
The need to slash the government’s expenditure was pegged on the projection by the Parliamentary Budget Office (PBO) that by June this year, Kenya’s debt stock would hit Sh8.6 trillion, a projection that came to pass. By June this year, the country’s debt ceiling had hit Sh8.7 trillion.
However, an agreement was reached and the BPS was adopted as originally published but with a rider that the National Treasury submits to the House proposed amendments to the Public Finance Management (National Government) Regulations to expand the country’s debt ceiling to Sh10 trillion.
Parliament would later expand the debt ceiling as proposed so as to avoid slashing the executive’s estimates by Sh400 billion as had been proposed by BAC in its report to the House.
Regulation 205 (5) of the PFM (National Government) Regulations requires that the regulations on budget ceiling to be approved by parliament, the National Assembly and the Senate.
The law mandates the National Treasury to include in the BPS document, an assessment of the current state of the economy and the financial outlook over the medium term, including macro-economic forecasts and the fiscal responsibility principles, and financial objectives, including limits on total annual debt.
Also required are the proposed expenditure limits for the national government (Executive), including those of Parliament and the Judiciary and indicative transfers to the county governments.
In preparing the BPS, the National Treasury shall seek and take into account of the views of the Commission on Revenue Allocation (CRA), county governments, Controller of Budget (CoB), Parliamentary Service Commission (PSC), Judicial Service Commission (JSC), the public and any other interested persons or groups. BY DAILY NATION
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