Financing For Thai Government Schemes Still Not Pinned Down

[webfact]

Financing for government schemes still not pinned down

By Wichit Chaitrong

The Nation

The government is still working out the details of how it will square the implementation of election campaign promises with budget constraints.

"Conditions on tax waivers for first-time car buyers and on incentives for first-time homebuyers may change, as the Finance Ministry is assessing how policy implementation will affect the government budget," Finance Minister Thirachai Phuvanatnaranubala said yesterday.

"We're looking at how each project to be implemented by the government will impact the government's finances," Thirachai told reporters.

As this is a preliminary assessment, the Finance Ministry has not yet reached a conclusion on the amount of public spending required for fiscal 2012 starting in October, he said.

The new government has promised large tax waivers - possibly of up to Bt100,000 each - for first-time home-buyers, who have also been promised zero-per-cent mortgage rates for five years from state banks.

Additional promises include a supporting fund of up to Bt100 billion for villagers, credit cards for farmers, wage rises for workers and new graduates, and corporate tax cuts.

Thirachai said he had not yet identified the sources of financing for these priority projects. He said the government's planned measures would stimulate economic activity, resulting in increased tax revenue. "We're seriously looking at possible sources of government income," he said.

However, an informed source said the government could run a budget deficit of as much as Bt480 billion, a cap imposed to ensure fiscal discipline. Four key economic institutions - the Finance Ministry, the Budget Bureau, the Bank of Thailand and the National Economic and Social Development Board - earlier announced an expected budget deficit of up to Bt350 billion for next fiscal year.

The raft of government promises is expected to strain the public coffers next year. Tax revenue typically accounts for just 16 to 17 per cent of GDP, forcing past governments to finance spending through borrowing.

Fearing rising production costs, the private sector has voiced strong opposition to the government's plan to sharply increase wages. The two sides have not yet reached an agreement on how to implement any wage hike.

The government is due to present its policy statement to Parliament next week.

-- The Nation 2011-08-20

[webfact]

Opposition ready to take the floor

By The Nation

The opposition is getting ready to question the government on how it will finance and implement its populist policies, many of which do not reflect campaign pledges, Democrat Party leader Abhisit Vejjajiva said yesterday.

Some 60 opposition Democrats have lined up to take the floor of the House of Representatives during the two-day policy debate, which is scheduled to kick off on Tuesday.

"After reading the policy statement, I detected a gap between what the government intends to implement and what it has promised the voters," Abhisit said.

The government has imposed a number of conditions on its campaign pledges, thus making it difficult for voters to predict when these populist policies could yield results, he said.

For example, the plan to increase the daily minimum wage to Bt300 is limited to civil servants and employees of state enterprises, not the general workforce, he said.

Abhisit added that the new government might face the people's wrath for failing to fulfil its campaign promises.

Democrat and chief opposition whip Jurin Laksanvisit said the main opposition party had been allotted about nine hours to speak during the policy debate.

The opposition lawmakers aim to present a broad assessment of the policy statement, focusing on how actual policies have moved from people's expectations and seek clarifications on how these policies will be financed, Jurin said.

Democrat spokesman Chavanond Intarakomalyasut said the party would meet during the weekend to discuss the topics they would consider and the policies they should scrutinise. The MPs will meet again on Monday to finalise their plan.

The coalition led by the Pheu Thai Party and Cabinet members will be given 11 hours to showcase their policies and come up with rebuttals.

-- The Nation 2011-08-20

[Soutpeel]

"For example, the plan to increase the daily minimum wage to Bt300 is limited to civil servants and employees of state enterprises, not the general workforce, he said."

And one would assume the vast majority of civil servants and state employees are already on more than THB 300/day....therefore implementing a policy which benefits just about no one.

I susepct the general voting public were under the impression it applied across the board...

[jonclark]

"For example, the plan to increase the daily minimum wage to Bt300 is limited to civil servants and employees of state enterprises, not the general workforce, he said."

And one would assume the vast majority of civil servants and state employees are already on more than THB 300/day....therefore implementing a policy which benefits just about no one.

I susepct the general voting public were under the impression it applied across the board...

It was advertised as such. Infact on the way back from my holidays at an intersection about 150km outside of Bangkok there is still a PTP election placard which promises the 300baht a day minimum. I suggest the dems go and collect it and take it into parliament for the debate. Just as a reminder as to what the government actually promised

[Crushdepth]

It's amusing to watch these numpties and their "brilliant economic team" squirm now that they have to try and *pay* for their promises. It was obvious during the campaign that they hadn't done the numbers and couldn't deliver.

[Colin Yai]

It's amusing to watch these numpties and their "brilliant economic team" squirm now that they have to try and *pay* for their promises. It was obvious during the campaign that they hadn't done the numbers and couldn't deliver.

Hey Crushdepth,Maybe they did do their"numbers" and knew for certain that they could not "deliver" on their promises,the only thing that really matters in a case like this is these mugs up here in Issan believed that they could !,LOL.

[maidu]

They can do what the US, Greece, Ireland and a slew of other countries do when spending beyond their means: borrow (from China?). Are there any countries which don't borrow to make ends meet?

Since cave man days, Politicians have made promises they couldn't keep. Ron Reagan promised no taxes and went on to enact the largest tax increase in US history. Gearge Bush Sr. said 'read my lips, no new taxes' .....and then went on to add taxes as soon as he was elected.

I'm surprised about the 100,000 baht tax waiver promise for first time Thai home buyers. I thought Thais didn't have real estate taxes. There aren't any real estate taxes up here in northern Thailand where I reside (that I know of). I've secured 4 properties up here and never seen a tax bill, no kidding.

It's particularly satisfying for absentee land holders from Bkk, who can snatch up large tracts of property and not have to worry about taxes. Not so fun for local folks trying to eke out a living, and forced to keep away from those large tracts of fallow properties.

[OzMick]

"Energy Minister Mr Pichai said his ministry will suspend collecting levies on premium petrol (benzene 95), regular petrol (benzene 91) and diesel for no more than one year.

The policy will be implemented immediately after the government delivers its policy statement before parliament.

However, reducing Oil Fund subsidies will cost the state about 3 billion baht a month ...................... issuing government bonds to subsidise the prices of LPG and CNG,

This would bring down the price of premium petrol (benzene 95) by 7.5 baht a litre, regular petrol (benzene 91) by 6.7 baht and diesel by 2.2 baht.

Mr Pichai said the Oil Fund will begin to collect fuel levies again when the public is earning better incomes as a result of the government’s economic policies."

Interesting - go into debt by about B36 billion to give a fuel price cut mainly to wealthier vehicle owners. Sounds like a Marxist economic idea to me; Groucho not Karl. It will be reversed "when the public is earning better incomes as a result of the government’s economic policies." Might be a long wait.

[hammered]

If PTP cant or wont introduce their policies does anyone really think the group best at PR in the country are just going to become bumbling fools? More likely they will say, look they are trying to dissolve us to stop you getting your pay raise. We want to help you but all they do is bring court cases, and then mention the large debt financing the Dems used in their strong Thailand projects that leave PTP with less than they thought. It is a poltical game and we await to see who comes out on top. Are policies delivered? Do people see them not delivered because of government unwillingness or because opponents stymie them?

[maidu]

Thai politicians, like politicians everywhere, are adept at bait and switch, and particularly slick at making excuses. "Pay no attention to the man behind the curtain" .....do you remember that line - at the end of the Wizard of Oz movie? It could apply to Madison Ave, as well as Wall Street as well as Bkk's Government building.

[thaicbr]

"Energy Minister Mr Pichai said his ministry will suspend collecting levies on premium petrol (benzene 95), regular petrol (benzene 91) and diesel for no more than one year.

The policy will be implemented immediately after the government delivers its policy statement before parliament.

However, reducing Oil Fund subsidies will cost the state about 3 billion baht a month ...................... issuing government bonds to subsidise the prices of LPG and CNG,

This would bring down the price of premium petrol (benzene 95) by 7.5 baht a litre, regular petrol (benzene 91) by 6.7 baht and diesel by 2.2 baht.

Mr Pichai said the Oil Fund will begin to collect fuel levies again when the public is earning better incomes as a result of the government's economic policies."

Interesting - go into debt by about B36 billion to give a fuel price cut mainly to wealthier vehicle owners

. Sounds like a Marxist economic idea to me; Groucho not Karl. It will be reversed "when the public is earning better incomes as a result of the government's economic policies." Might be a long wait.

That's true.. it's mainly the exotic cars that need the premium fuel. Whereas the poor people are using gasohol and CNG

[rubl]

If PTP cant or wont introduce their policies does anyone really think the group best at PR in the country are just going to become bumbling fools? More likely they will say, look they are trying to dissolve us to stop you getting your pay raise. We want to help you but all they do is bring court cases, and then mention the large debt financing the Dems used in their strong Thailand projects that leave PTP with less than they thought. It is a poltical game and we await to see who comes out on top. Are policies delivered? Do people see them not delivered because of government unwillingness or because opponents stymie them?

Normal people would call the political game you describe 'a bunch of lies'. Mind you Pheu Thai seems good at that

Edited August 20, 2011 by rubl

[Phatcharanan]

Ron Reagan promised no taxes and went on to enact the largest tax increase in US history.

Absolutely ridiculous comment by someone who is obviously clueless.

Reagan LOWERED taxes.

[Bakseedaa]

If PTP cant or wont introduce their policies does anyone really think the group best at PR in the country are just going to become bumbling fools? More likely they will say, look they are trying to dissolve us to stop you getting your pay raise. We want to help you but all they do is bring court cases, and then mention the large debt financing the Dems used in their strong Thailand projects that leave PTP with less than they thought. It is a poltical game and we await to see who comes out on top. Are policies delivered? Do people see them not delivered because of government unwillingness or because opponents stymie them?

And which "strong Thailand Projects" are you talking about now... we need facts, not your wifes ravings...

[dcutman]

Ron Reagan promised no taxes and went on to enact the largest tax increase in US history.

Absolutely ridiculous comment by someone who is obviously clueless.

Reagan LOWERED taxes.

Yes Sir he did lower taxes one time. The he inturn raised them 11 times during his presidency. Not including all the tax hikes he did as California governor. In fact he holds the record for the highest tax hike in American history. You might want to google things before your comments make you look foolish. Here is just one of hundreds of links.

http://capitalgainsa...tten-tax-record

Edited August 20, 2011 by dcutman

[rubl]

Ron Reagan promised no taxes and went on to enact the largest tax increase in US history.

Absolutely ridiculous comment by someone who is obviously clueless.

Reagan LOWERED taxes.

True, it was George H. W. Bush

""Read my lips: no new taxes" is a now-famous phrase spoken by then presidential candidate George H. W. Bush at the 1988 Republican National Convention as he accepted the nomination on August 18."

http://en.wikipedia.org/wiki/Read_my_lips:_no_new_taxes

Edited August 20, 2011 by rubl

[dcutman]

So much conflicting reports about this wage increase.

I just had a good read, interview with Thaksin about all the populous policy. I guess he is the tail waggin this dog, so I will tend to believe this article.

One of the key notes, Only workers in BKK get 300thb, lower in the rest of the country.

http://www.intellasi...5_printer.shtml

Edited August 20, 2011 by dcutman

[rubl]

So much conflicting reports about this wage increase.

I just had a good read, interview with Thaksin about all the populous policy. I guess he is the man in charge so I will tend to believe this article.

One of the key notes, Only workers in BKK get 300thb, lower in the rest of the country.

http://www.intellasia.net/news/articles/thailand/111332075_printer.shtml

Published 2011-07-12, described as 'he spoke recently', just after the elections it seems.

I don't think it's up-to-date as to what the new government has said the last few days. they started to think about how they could possible do all they promised and have adjusted a 'wee bit'

[dcutman]

So much conflicting reports about this wage increase.

I just had a good read, interview with Thaksin about all the populous policy. I guess he is the man in charge so I will tend to believe this article.

One of the key notes, Only workers in BKK get 300thb, lower in the rest of the country.

http://www.intellasi...5_printer.shtml

Published 2011-07-12, described as 'he spoke recently', just after the elections it seems.

I don't think it's up-to-date as to what the new government has said the last few days. they started to think about how they could possible do all they promised and have adjusted a 'wee bit'

Understood

I guess I should have said, the man leading this dog and pony show (Mr T) is going to have the final say, how, wich or any of these poicies will be implemented.