mps’ perks jump 100%

Parliamentarians have doubled their remuneration package to over K1.4 million each and tripled their loan facility to K24 million, Nation on Sunday has learnt.
According to information we have gathered from the National Assembly and corroborated by a Ministry of Finance source, the gross package for members of Parliament (MPs) has doubled from K724 114 a month and the loan facility has more than tripled from around K7 million.
The self-showered largesse comes even as the National Budget buckles under K0.5 trillion in local debts comprising K158.5 billion in arrears to the private sector for various goods and services and a domestic debt overhang of K340 billion, which Capital Hill incurred by borrowing from the local financial market.

 
Treasury is also struggling to fill the funding vacuum left by angry donors who account for 40 percent of the expenditure plan and comes as the new DPP administration struggles to stitch together billions to fund welfare programmes it promised during the campaign and which it wants to start implementing in 2014/15.
The new package comes from the MPs’ basic salary hike from K179 500 to K250 000 and a rise in their consolidated allowances—excluding sitting allowances—that have almost doubled from K544 614 to K1.1 million a month.
The allowances that have been raised include housing, constituency, utility and motor vehicle maintenance. The most noticeable jump is on motor vehicle maintenance allowance that has moved from K150 000 to K600 000 a month.

 
The 100 percent increase means that the 193 MPs’ total wage bill has doubled to K270 million a month, K3.2 billion a year and K16.2 billion at the end of the current House’s five-year mandate, assuming there will not be other increments over the period.
The K3.2 billion annual allocation to MPs’ salaries alone is more than double the K1.5 billion that was allocated in the currently extended 2013/14 fiscal year to the Ministry of Trade and Industry, which supports wealth creation or the K1.4 billion for the Anti-Corruption Bureau (ACB) to fight graft nationally in the same fiscal plan.
But the amount competes with the K3.1 billion allocated to the Ministry of Transport and Public Works.
Furthermore, the 193 MPs’ new annual perks represent 2.4 percent of the K131 billion total wages and salaries allocation for the 120 000 plus people on government payroll.

 
Meanwhile, Malawian taxpayers will at the expiry of the current National Assembly in 2019 cough out about K2.3 billion to subsidise MPs’ luxurious life by helping repay half of the K24 million maximum loan each of the legislators is entitled to in a revised loan scheme.
The K24 million is higher than the K15 million Nation on Sunday recently reported that the MPs had initially negotiated.
The new loan scheme entitles legislators access to more money than the previous House and meant that Parliament had to double remuneration package for the MPs to accommodate the huge loans.
According to labour laws, an employee can only get a loan whose monthly repayment is less than 50 percent of their monthly net pay.
And our sources have confirmed that this is the direction the National Assembly has taken.
Despite Parliament projecting that the loan facility to the MPs be pegged at K15 million, Nation on Sunday has learnt that some legislators have already obtained loans of up to K24 million from commercial banks such as government-owned Malawi Savings Bank (MSB).
Our source at the National Assembly revealed that with the K24 million, MPs are expected to repay K12 million in full over five years while the remainder will be an honoraria to them and shall be footed by taxpayers.

 
The source said: “For the current MPs, they have got K24 million bank loans of which half [K12 million] is honoraria and will be paid by Malawi government while the other half is what each one of them will pay back to the bank. The new MPs’ loan bracket is more than the previous MPs had.”
Parliament had envisaged that MPs would be taking loans from banks at a maximum of K15 million.
The House based the loan maximum figure on MPs’ gross monthly package of K1.4 million, of which K289 000 would be deducted from the gross as capital deduction of the loan; K29 000 would be recovered as interest, all coming to K318 000 as monthly deductions.
The take home package (net) for MPs was envisaged to be K1.1 million. However, this was discarded and MPs have been offered the revised loan scheme, with each one of them accessing up to K24 million.
Ministry of Finance spokesperson Nations Msowoya could neither confirm nor deny the MPs’ pay package, but referred Nation on Sunday to Parliamentary Service Commission [PSC], saying it was better placed to comment as the issue involves conditions of service of legislators.
“What we are talking about here are conditions of service for MPs and the better institution to comment on these matters would be the [PSC],” he said in a phone interview on Friday.

 
However, a source at Treasury said the ministry was forced into accepting the proposal by Parliament. Several MPs whom Nation on Sunday contacted separately refused to comment on the matter.
As we went to press yesterday afternoon, National Assembly spokesperson Leonard Mengezi had not responded to our questionnaire e-mailed to him on Friday on recommendation from Acting Clerk of Parliament Roosevelt Gondwe.
However, Speaker Richard Msowoya said as PSC, they are yet to finalise revision of the legislators’ pay package as they want to go on a study tour of some countries on how such perks are computed.
Asked why MSB and other banks have already started disbursing loans based on the revised pay package, the Speaker said banks can have special agreements with individual MPs over loans.
MSB business development and marketing manager Brenda Chilima, in response to questions sent through e-mail, said the bank has a memorandum of understanding (MoU) with government and Parliament guiding management of the loans. n