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A brief to the president by The Treasury dated September 11, has revealed that the government will not honour the pay increment to teachers but will instead challenge the court award.

The note advises the President not to honour the award because “it is unsustainable and would distort the public wage bill”.

“As you may have noted in this brief, teachers have been more than compensated through increases made so far and they earn higher wages than other public sector workers,” the Treasury says.

It notes that the options available, including raising taxes, borrowing or reducing expenditure in ministries, departments and agencies “have severe consequences for the economy and would, therefore, not be appropriate at this time”.

“Taking these considerations into account, it is recommended that the government await the conclusion of the appeal and ensure a more vigorous defence of the government position,” the brief goes on.

“In the meantime, there should be no payment to the teachers on strike.”

In the brief, the Treasury says the government has a limited scope for manoeuvre as most of the recurrent expenditure is committed to salaries, debt service and transfers to counties and state agencies.

“Cutting development expenditure will hamper growth and poverty reduction, in addition to affecting the completion of ongoing projects. More fundamentally, it will reduce the share of development expenditure of total budget to 25 per cent, which is below the 30 per cent required under the Public Finance Management Act,” Treasury argues.

Treasury bureaucrats also say any increase in taxes would sharply raise the price of basic commodities, in turn increasing the cost of living.

“To raise the required amount, Value Added Tax needs to be increased from 16 to 21 per cent in the 2015/16 financial year. This would not only affect citizens directly but also undermine Kenya’s competitiveness and slow down growth,” they advise.

“Borrowing will push interest rates up, negatively impacting on private sector investment, undermining growth prospects and lowering standards of living.

Ideally, borrowing should be reserved for building infrastructure which increases the productivity of the economy, generates jobs and thus enhances the wealth of the country.”

The Treasury also says the increment would have a spiral effect on other civil servants, police and prisons officers.

“It is estimated that this will cost the taxpayer Sh154.6 billion. Teachers alone will require about Sh99.8 billion between 2013 and 2017. In the current financial year, it is estimated that the government requires Sh103.0 billion to implement the award,” the statement goes on.   

Even then, the Sh154.6 billion does not include additional pensions costs associated with the salary award, the brief goes on.

The document presented to the President refute claims by unions that teachers are grossly underpaid.

According to the document, since the teachers and civil servants’ salaries have been harmonised, the increment would distort the equity in remuneration.

“It is, therefore, evident that teachers’ salaries are comparable to other public servants and their peers, but with the award the harmonisation will be distorted,” it says.

The document says the salary of the highest paid teachers, who are the chief principals, is close to what university lecturers earn though the academic qualification of a secondary school principal is far lower than that of a public university lecturer.

“A chief principal in job group ‘R’ earns a maximum gross monthly pay of Sh144,928, which is comparable to a senior lecturer in a public university, who gets Sh150,926. If the 50-60 per cent award is implemented, the chief principal will earn Sh302,000 higher than a full professor, who earns Sh296,632,” the brief to the President says.

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