10% SALARY CUT VRS 10% KICKBACK

The difference bewteen a ‘property grabbing’ and ‘People’s gov’t’

Last Tuesday, the Finance Minister Seth Tekper, took to the floor of parliament to perform an annual ritual of presenting the nation’s fiscal policy to the house of Parliament in line with the Article 179 of the 1992 constitution.

Since the event in Parliament, most serious economists and business minded people have described the 2014 Budget as quite like none they had ever seen in recent projections of successive governments in terms of its frankness, and transformational character. 

Among other things, there were significant highpoints of the budget including tax removals and favorable adjustments.

 However,  the 10% voluntary salary cut by President Mahama and all government appointees announced in the budget appears to have sunk a dagger in the hearts of many opposition elements who thought it was rather a populist move.

 Juxtaposing the 10% voluntary salary give away by the NDC government functionaries to allegations by former National Chairman of the NPP, Alhaji Haruna Esseku that the government under President John Agyekum Kufuor was illegally collecting a 10% Kickback from would be contractors before awarding contract to them, it is obvious why Minority Leader, Osei Kyei Mensah Bonsu and his allied Think Tank called, IMANI are chastising and labeling the budget with all kinds of mundane descriptions.

According to the NPP Chairman who was speaking to his party delegates in a secret meeting at a location in the Eastern Region of Ghana, accruals from the illegal kickback collection were  being kept by President Kufuor himself.

Interestingly, accruals from the voluntary salary cut of the Mahama government  as announce by the Finance Minister, are to be used to support maternal health care; showing a huge class between the two leading political parties.

    Also whilst under the erstwhile Kuffuor government, there was a calculated effort to crippled state agencies and weaken their ability to keep watch over the highly corrupted executives the current budget has shown its eagerness to tackle corruption on various fronts.

According to Mr. Seth Tekper,  the government has increased allocations to the state anti-corruption agencies to intensify their ongoing war on graft.

“To fight corruption in all its forms and, following H.E's directives, additional budget provisions have been made to strengthen anti¬corruption agencies, notably CHRAJ. A percentage of proceeds of corruption when recovered, will be paid to anti-corruption agencies instrumental in exposing such acts, and this will further strengthen their resource base”

Mr. Seth Terkper, presenting the 2014 Budget statement and Economic Policy of the government in Parliament, has announced that the President, His Excellency John Dramani Mahama, his Veep, Paa Kwesi Amissah Arthur, together with Government Appointees and Ministers of State will take a "a voluntary 10% pay cut" next year.

He further revealed that "the amount to be deducted will be channeled into maternal health".

According to him, the move is to demonstrate leadership and several efforts being put in place to solve the ballooning wage bill of public sector workers due to the implementation of the Single Spine Salary Structure.

“Single Spine Salary Structure is imposing severe strain on the economy but government, employers and organized labour are continuing negotiations on how to solve it....We believe we are of one mind and therefore we are determined that the public sector wages will not put a strain on budget…to demonstrate leadership, the president, his Vice, appointees and ministers of State have decided to take a voluntary 10% pay cut in 2014...the amount to be deducted will be channeled into maternal health,” Hon Seth Terkper said.

As usual, the NPP and its apocalypse think tank, IMANI have been condemning the budget in other to divert attention from the visible contrast between their government and that of the current.

 Professor George Yaw Gyan-Baffour, Member of Parliament (MP) for Wenchi and a ranking member of the Minority on Finance, said the budget indicated a bleak future for Ghana’s economy, because the economic policy statement did not espouse concrete actions, policies and programmes that would transform the economy.

He said the focus on infrastructural development alone cannot transform the economy, adding that govern ought to be bold to put more money in Small and Medium Scale Enterprise development and encourage private sector growth and reduce the cost of credit to propel the financial system significantly.

The lawmaker expressed fear that the revenue government has projected to realise from the 2.5 per cent increase in the Value Added Tax rate would not be applied to the shore up infrastructural development but would be utilised for other sectors of the economy because of the unrealistic projections in the budget.

Prof Gyan-Baffour said he was not enthused that government chose to increase the tax rate instead of broadening the tax base, suggesting that the move would stifle private sector growth and dwindle the fortunes of the economy.

Also condemning the novel gesture from government officials was  Franklin Cudjoe  who said the cut was rather too small.

 Speaking on Joy fm morning show yesterday, "I thought the percentage should have been more in line with tariff that have been increased. I think the 10 per cent is small.

" Pushing further, Franklin Cudjoe noted the "real" cut should be directed at waste within government bureaucracy and contracts that does not give government value for money.