Populist Policies In The Work Ahead Of Next Thai Election In 2011

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GOVERNMENT SPENDING

Populist policies in the work ahead of next election in 2011

By BUSINESS REPORTERS

THE NATION

The Abhisit Vejjajiva government is preparing to introduce a mass of populist and social-welfare measures to win advance votes before the next election, scheduled for next year.

BANGKOK: -- The latest case in point is a plan to increase civil servants' salaries 5 per cent in the second half of fiscal 2011. The pay raise, which will cost an additional Bt30 billion on top of the present Bt500-billion salary expenditure, will take effect around next April next year - about 10 months from now.

In addition, the government is considering extending cost-of-living measures for low-income earners, including relief from energy costs, while preparing to forgive a massive amount of farmers' debt.

The list of populist and social-welfare measures since Prime Minister Abhisit Vejjajiva took office more than 18 months ago has been extensive.

It seems fortunate that the country's fiscal reserves still stand at a high Bt180 billion, while public debt remains relatively low at 42 per |cent of gross domestic product (GDP).

However, public debts will soar if revenue continues to fall short of spending and the government must borrow to cover growing fiscal deficits.

The public-debt crisis in Greece should be a big lesson for all governments who overspend public money for an extended period.

Free electricity, bus and train rides for low-income earners, which may be further extended, would cost the public Bt4.5 billion every three months.

Originally, in 2008, when the price of oil spiked to more than US$140 per barrel for the first time, the Samak government initiated a total of six cost-of-living measures to help the poor.

Over six months, it spent about Bt40 billion.

Then, the Abhisit government adopted five such measures - free electricity, buses, trains and water and a freeze on the price of cooking gas.

The cooking-gas subsidy was dropped in March, but the Energy Ministry plans to resurrect it for another six months, with the Oil Fund expected to spend another Bt6 billion on subsidies.

On farmers' debts, the Cabinet approved a programme last week under which four state banks will grant a 50-per-cent reduction of debts owed by farmers, provided they join a related career-development plan.

Farmers accepting the offer will be allowed to clear their remaining debts over 15 years with special interest terms equalling the banks' minimum retail rate minus 3 percentage points.

Currently, there are about 80,000 farmers with non-performing loans.

Earlier, the Abhisit government approved a huge subsidy covering 15 years of free schooling. It applies to free textbooks, uniforms and other learning materials.

About Bt6 billion is to be spent on free textbooks; Bt4.5 billion on school uniforms; Bt2 billion on learning materials and Bt4 billion on special activities. Private schools will get Bt1.5-billion worth of state subsidies.

The 2010 budget for free schooling is Bt73 billion.

The government is also planning to introduce a savings-matching programme for senior citizens, covering more than 3,000 communities around the country in which it will set aside funds to match the savings of old people.

Over the next 20 years, people aged 60 and over will make up 25 per cent of the population, up from the current 11 to 12 per cent. If the government opted to use income-tax revenue to provide welfare for the elderly, the tax rate would soar |and the country would lose its competitiveness. So the joint-savings programme is regarded as a necessity.

Currently, the government is providing Bt500 per month to elderly people.

The cost of the farmer-income insurance scheme is estimated to be Bt30 billion annually, covering 3.19 million rice farmers (Bt28.35 billion); 379,785 cassava farmers (Bt2.43 billion); and 379,304 corn farmers (Bt5.63 billion).

Earlier, the government also initiated a programme to relieve the debt burden on poor people caused by high-interest loans.

About 1.19 million debtors registered with the government, representing a combined debt of Bt122 billion.

From January 2009 to April 2010, the government provided tax incentives for property buyers and businesses totalling Bt34.73 billion. It has now restored the special-business tax of 3.3 per cent after reducing it to 0.1 per cent; restored the property transfer fee to 2 per cent from 0.01 per cent; and restored the mortgage registration fee to 1 per cent from 0.01 per cent.

In assistance to the tourism sector, the Cabinet has approved a multi-billion-baht loan package to help operators hit by the April and May riots in Bangkok, while suspending visa fees and reducing aircraft-landing fees to lure more foreign visitors.

On funeral services for the poor, the Social Development and Human Security Ministry has allocated Bt44.13 million to pay for the funeral rites of 22,063 people who have died of natural causes. Over the full fiscal year, it expects to spend Bt475 million on funeral services for 237,663 poor people.

In addition, the government is reportedly planning a savings programme for newborn babies, who will be entitled to a monthly Bt500 state-sponsored saving programme until they are 18. This will cost the government Bt6,000 per newborn per year.

-- The Nation 2010-06-29

[Rucharee]

Thaksin is a criminal and populist.

Mark is a good looking kind leader. Our dear leader, just like Mr. Kim.

[Pib]

Freebies/benefits/etc., basically buys votes...most governments in the world do it. And the year before the elections is usually the most generous time.

[landofthefree]

Thaksin is a criminal and populist.

Mark is a good looking kind leader. Our dear leader, just like Mr. Kim.

Thaksin whatever you mights think about him has done something Abhisit has yet to do and that is to win a general election. The score at the moment is Thaksin 2 Abhisit 0. If Abhisits obvious vote buying policies work it may be that he has a chance at the next election but I'm not holding my breath and neither is he otherwise he would be calling an election now. He obviously is following in the usual Thai tradition of vote buying I'm sure he doesnt really give a rats arse about the plight of the poor.

[hyperdimension]

If Abhisits obvious vote buying policies work it may be that he has a chance at the next election but I'm not holding my breath and neither is he otherwise he would be calling an election now. He obviously is following in the usual Thai tradition of vote buying I'm sure he doesnt really give a rats arse about the plight of the poor.

How obvious were Thaksin's parties' vote-buying campaigns that got them elected?

Would you prefer that this government offered 10K THB to anyone who voted for the Democrats? Surely that would be easier than designing and implementing these long-term "vote-buying" policies in order to be re-elected.

Edited June 29, 2010 by hyperdimension

[ThaiAdventure]

Cynics call it vote buying. I call it the beginnings of a welfare state.

[Hyponeros]

Thaksin is a criminal and populist.

Mark is a good looking kind leader. Our dear leader, just like Mr. Kim.

I was always told Thais are going the middle way! For you things are black or white! So I guess you are not Thai!

[hyperdimension]

Thaksin is a criminal and populist.

Mark is a good looking kind leader. Our dear leader, just like Mr. Kim.

Are you putting Abhisit in the same light as Kim Jong Il?

You don't make much sense most of the time. However, since you are a girl, you are forgiven. One valuable thing about your posts is that it shows all of us the kind of thinking that goes on in Thai girls.

Edited June 29, 2010 by hyperdimension