Karua Unveils ‘Rescue Budget’, Vows to Scrap Housing Levy and Boost Funding
People’s Liberation Party (PLP) leader Martha Karua has unveiled what she terms a “Rescue Budget,” positioning it as a people-centered alternative to the government’s proposed 2026/2027 budget and accusing the Kenya Kwanza administration of overtaxing citizens while failing to deliver quality public services.
Speaking to the press on Monday in Nairobi Karua said the country does not suffer from a revenue shortage but rather from poor leadership, corruption, wasteful expenditure and misplaced priorities. She argued that Kenyans are paying more taxes while receiving fewer services from government.
“Instead of hope, Kenyans anticipate new taxes. Instead of relief, they expect more pain. Instead of accountability, they witness waste, corruption and misplaced priorities,” Karua said while unveiling her proposed Rescue Budget.
The former Justice Minister claimed the government’s fiscal approach has contributed to growing public frustration, particularly among young people demanding accountability, transparency and economic opportunities.
Karua said the alternative budget would focus on reducing the burden on households while increasing investment in sectors she described as critical to Kenya’s long-term development, including education, healthcare, agriculture and youth empowerment.
Among the key proposals is increased funding for education through enhanced school capitation, improved learning infrastructure and greater support for teachers. In healthcare, Karua pledged to expand access to affordable medical services, improve public hospitals and strengthen the welfare of healthcare workers. She also proposed reducing national health insurance contributions to KSh500 per family while improving efficiency and accountability within the healthcare system.
Karua further proposed allocating KSh285 billion to agriculture and food security initiatives, including fertilizer subsidies, irrigation infrastructure, agricultural extension services, climate-smart farming and value addition programmes. She argued that supporting farmers is essential to strengthening food security and driving economic growth.
“The farmer must once again become central to Kenya’s economic transformation,” she said.
The PLP leader also outlined a programme of fiscal discipline aimed at reducing government expenditure. Under her proposal, non-essential government spending would be cut by at least 60 percent, luxury expenditures and excessive travel would be curtailed, stalled projects audited, and public officers held personally accountable for unauthorized spending.
In a move likely to resonate with workers, Karua pledged to abolish the Housing Levy, arguing that it has become an additional burden on employees without delivering corresponding benefits to most contributors.
“Government must stop viewing citizens as endless sources of revenue. Before asking Kenyans to pay more, government must first prove it can responsibly manage what it already collects,” she said.
Karua also addressed concerns facing businesses, particularly the issue of pending bills. Karua noted that unpaid government obligations amounting to more than KSh525 billion have crippled enterprises and cost jobs. She pledged to audit and settle legitimate pending bills while promoting policies aimed at supporting small and medium-sized enterprises, innovation and entrepreneurship.
For young people, Karua proposed investments in skills development, vocational training, sports, technology and digital entrepreneurship. She also pledged to oppose what she described as punitive taxes on mobile money services, internet services and digital platforms.
The Rescue Budget comes amid heightened debate over the government’s spending plans and the Finance Bill, with opposition leaders increasingly seeking to present alternative economic proposals ahead of the next election cycle.
Karua framed the proposal as a choice between what she described as fair taxation and fiscal discipline on one hand, and higher taxes, increased borrowing and continued economic hardship on the other.
“The suffering facing Kenyans today is not inevitable. It is the consequence of poor policy choices and failed leadership. And what leadership has created, better leadership can correct,” she said.
Her proposals are likely to add momentum to the ongoing national conversation over taxation, public spending and the government’s management of the economy as Parliament prepares to debate the budget and Finance Bill proposals in the coming weeks.
