Government spending priorities

It is interesting to compare the incomes and spending priorities of the governments of Australia and Kenya. Australia has around 21 million people, whereas Kenya has around 37 million. According to its 2007-8 budget, the Kenyan government expects to receive $7.3 billion (Australian dollar equivalent) in revenue, the major components being $2.5 billion from income tax, $1.9 billion from value added tax, and $1.6 billion from excise and import duties. According to its 2007-8 budget, the Australian government expects revenue of $247 billion, the main sources of which are income tax $120 billion, and company tax $67 billion.

The Australian government expects to spend $236 billion, leaving a surplus of $11 billion, with $96 billion (41%) spent on welfare, $43 billion (18%) on health, $20 billion (8%) on defence, $18 billion (8%) on education and $32 billion (14%) on general government services. Kenya expects to spend $9.8 billion, leaving a deficit of $2.5 billion, which is to be funded by foreign aid grants, proceeds of privatisation and borrowings. Kenya plans to spend $2.9 billion (40% of its revenue) on civil service salaries and pensions and related costs, $0.8 billion (11%) on defence, $0.9 billion (12%) on interest repayments, $2.9 billion (40%) on “development” (mainly funded by foreign aid and borrowings), and $2.4 billion (33%) on “other”.

It is interesting to note that the main spending priorities of the Australian government (welfare and health) are not considered sufficiently important in Kenya to warrant separate itemisation. The main Kenyan spending priority is payment of salaries to civil servants. Although the Kenyan government’s revenue is less than 3% of the Australian government, the salaries of benefits received by Kenyan members of parliament are greater than those of Australian MPs.