WATCHDOG

Government must beware of ballooning budget deficits

Nophakhun Limsamarnphun

BANGKOK: -- The opposition Democrat Party has cautioned that the country's off-budget deficit could balloon in 2013 as the Yingluck government struggles to keep its populist policy pledges.

Last Wednesday, the government's overall state expenditure budget of Bt2.4 trillion for fiscal year 2013, which begins on October 1 this year, sailed through Parliament in its first reading.

Under the 2013 budget planning, the government's net income is estimated at Bt2.1 trillion, which will result in a deficit of Bt300 billion.

The 2013 fiscal spending plan includes Bt449.3 billion for investment, Bt1.9 trillion for regular expenses and Bt49.14 billion for the payment of loan principals.

The budget includes Bt30 billion set aside for the new phrase of the nationwide village fund, covering a total of 80,000 small, medium and large communities.

Prime Minister Yingluck Shinawatra said this new village fund is called the SML village and community development programme, aimed at providing credit access to the rural poor who want to develop small businesses.

A small village with a population of no more than 500 will be granted a credit facility of Bt300,000, while a medium-sized village with population of 501-1,000 will get a credit facility of Bt400,000. A large village with a population of more than 1,000 will get a credit facility of Bt500,000.

The nationwide village fund was initiated by the Thaksin Shinawatra government in the early 2000s with a total budget of over Bt77 billion or a credit facility of Bt1 million per village. Then, Thailand had a total of around 77,000 villages.

Yingluck said the government is now ready to transfer the additional budget of Bt30 billion to each of the 80,000 villages nationwide, once these villages have set up their own committees to take responsibility for use of the money.

The village fund programme was one of the original populist policies used by the previous Thaksin government to draw broad-based support from grassroots voters.

Besides this, the ruling Pheu Thai Party won the last general election on a pledge to cut the diesel oil tax, a measure which currently costs the government Bt9 billion per month or more than Bt40 billion since the start of this year.

The ruling party also won the poll with the rice subsidy scheme for farmers, to give them a price of Bt15,000 per tonne, but the government is expected to lose tens of billions of baht from this scheme. Such a likely loss will show up on the books of state-owned banks such as the Bank of Agriculture and Agricultural Cooperatives.

According to Kiat Sitti-amorn of the opposition Democrats, the government's rice scheme may lead to losses of as much as Bt50-60 billion off the state expenditure budget due to the high prices set by the government for rice.

The rising rice stock accumulated by the government has depressed export rice prices. In the end, middlemen will benefit the most from this scheme, not the farmers, as the scheme is now only 30 per cent completed.

Another populist policy that is hurting state coffers is the ruling party's corporate income tax cut from 30 per cent to 23 per cent. This has reduced state coffers by nearly Bt50 billion in tax revenue losses this year.

On the other hand, the government needs to set aside additional budgets for flood prevention and related schemes following last year's massive deluge. This resulted in across-the-board budget cuts for many other state units, with the likelihood that taxes will have to be raised soon.

-- The Nation 2012-05-26

Spend, spend, spend.

Sent from my Galaxy Nexus using Thaivisa Connect App

Why in the world is the Thai government investing in ballooning?

It's vote buying all over the place, and spending for projects that never work out, from the Nation's tax money that these nasty swines get from exploiting and ripping them off

AEC members holding their breath.

AEC members holding their breath.

Meanwhile, in parliament........

http://www.bbc.co.uk/news/business-18203209

Will anybody take notice and initiate positive action? Or will somebody point out that foreign investment experts are not their father?

http://www.bbc.co.uk/news/business-18203209

Will anybody take notice and initiate positive action? Or will somebody point out that foreign investment experts are not their father?

Pure Thaksinomics. Last time the economy was booming. This time the possibility of a bankrupt state looms in 2013 when liquidity ceases

Sent from my Galaxy Nexus using Thaivisa Connect App

http://www.bbc.co.uk...siness-18203209

Will anybody take notice and initiate positive action? Or will somebody point out that foreign investment experts are not their father?

Pure Thaksinomics. Last time the economy was booming. This time the possibility of a bankrupt state looms in 2013 when liquidity ceases

Sent from my Galaxy Nexus using Thaivisa Connect App

As you rightly say, last time the government invested directly in some of the poorest regions during the Thaxsin administration, the country's economy boomed. It's good to see the same policies being re-introduced and we can look forward to a new booming economy in the years ahead.

Hopefully, the government will also continue the land-reform policies of Thaksin that gave entitlement rights to tens of thousands of the country's poorest people, thus creating a framework of stability in which banks are more willing to invest.

Even Prem is coming out and praising this government as noted in another thread. Keep up the good work Yingluck.

http://www.bbc.co.uk...siness-18203209

Will anybody take notice and initiate positive action? Or will somebody point out that foreign investment experts are not their father?

Pure Thaksinomics. Last time the economy was booming. This time the possibility of a bankrupt state looms in 2013 when liquidity ceases

Sent from my Galaxy Nexus using Thaivisa Connect App

As you rightly say, last time the government invested directly in some of the poorest regions during the Thaxsin administration, the country's economy boomed. It's good to see the same policies being re-introduced and we can look forward to a new booming economy in the years ahead.

Hopefully, the government will also continue the land-reform policies of Thaksin that gave entitlement rights to tens of thousands of the country's poorest people, thus creating a framework of stability in which banks are more willing to invest.

Even Prem is coming out and praising this government as noted in another thread. Keep up the good work Yingluck.

Hahaha

Sent from my Galaxy Nexus using Thaivisa Connect App

These policies may be aimed at either helping the poor to become a bit less poor and thereby stimulate the economy with the extra indiviual expenditure, or it may simply be a vote buying ploy that will see the nation's debt outpace GDP and lead to an Asian Greece, I hope the government isn't counting on the combined GDPs of the ASEAN nations to bail them out when ASEAN is launched in three years, that could be a disasterous start for the new economic union, Just a thought.

As you rightly say, last time the government invested directly in some of the poorest regions during the Thaxsin administration, the country's economy boomed. It's good to see the same policies being re-introduced and we can look forward to a new booming economy in the years ahead.

Hopefully, the government will also continue the land-reform policies of Thaksin that gave entitlement rights to tens of thousands of the country's poorest people, thus creating a framework of stability in which banks are more willing to invest.

Even Prem is coming out and praising this government as noted in another thread. Keep up the good work Yingluck.

It's quite amazing how Thaksin's administration caused a worldwide economic boom.

As you rightly say, last time the government invested directly in some of the poorest regions during the Thaxsin administration, the country's economy boomed. It's good to see the same policies being re-introduced and we can look forward to a new booming economy in the years ahead.

Hopefully, the government will also continue the land-reform policies of Thaksin that gave entitlement rights to tens of thousands of the country's poorest people, thus creating a framework of stability in which banks are more willing to invest.

Even Prem is coming out and praising this government as noted in another thread. Keep up the good work Yingluck.

It's quite amazing how Thaksin's administration caused a worldwide economic boom.

http://www.bbc.co.uk...siness-18203209

Will anybody take notice and initiate positive action? Or will somebody point out that foreign investment experts are not their father?

Pure Thaksinomics. Last time the economy was booming. This time the possibility of a bankrupt state looms in 2013 when liquidity ceases

Sent from my Galaxy Nexus using Thaivisa Connect App

As you rightly say, last time the government invested directly in some of the poorest regions during the Thaxsin administration, the country's economy boomed. It's good to see the same policies being re-introduced and we can look forward to a new booming economy in the years ahead.

Hopefully, the government will also continue the land-reform policies of Thaksin that gave entitlement rights to tens of thousands of the country's poorest people, thus creating a framework of stability in which banks are more willing to invest.

Even Prem is coming out and praising this government as noted in another thread. Keep up the good work Yingluck.

You should be aware that sarcasm gets lost in the written form.

As you rightly say, last time the government invested directly in some of the poorest regions during the Thaxsin administration, the country's economy boomed. It's good to see the same policies being re-introduced and we can look forward to a new booming economy in the years ahead.

Hopefully, the government will also continue the land-reform policies of Thaksin that gave entitlement rights to tens of thousands of the country's poorest people, thus creating a framework of stability in which banks are more willing to invest.

Even Prem is coming out and praising this government as noted in another thread. Keep up the good work Yingluck.

It's quite amazing how Thaksin's administration caused a worldwide economic boom.

Try to read a little more carefully, sir.

Why in the world is the Thai government investing in ballooning?

Must be the endless supply of hot air.

As you rightly say, last time the government invested directly in some of the poorest regions during the Thaxsin administration, the country's economy boomed. It's good to see the same policies being re-introduced and we can look forward to a new booming economy in the years ahead.

Hopefully, the government will also continue the land-reform policies of Thaksin that gave entitlement rights to tens of thousands of the country's poorest people, thus creating a framework of stability in which banks are more willing to invest.

Even Prem is coming out and praising this government as noted in another thread. Keep up the good work Yingluck.

It's quite amazing how Thaksin's administration caused a worldwide economic boom.

Try to read a little more carefully, sir.

Right. Thailand's economic boom had nothing to do with the worldwide economic boom at the time. Thailand's boom was ALL due to Thaksin's policies.

As you rightly say, last time the government invested directly in some of the poorest regions during the Thaxsin administration, the country's economy boomed. It's good to see the same policies being re-introduced and we can look forward to a new booming economy in the years ahead.

Hopefully, the government will also continue the land-reform policies of Thaksin that gave entitlement rights to tens of thousands of the country's poorest people, thus creating a framework of stability in which banks are more willing to invest.

Even Prem is coming out and praising this government as noted in another thread. Keep up the good work Yingluck.

It's quite amazing how Thaksin's administration caused a worldwide economic boom.

Try to read a little more carefully, sir.

Right. Thailand's economic boom had nothing to do with the worldwide economic boom at the time. Thailand's boom was ALL due to Thaksin's policies.

Even Gordon Brown looked like he knew what he was doing back in the boom times and that fool cost us billions blowing our gold reserves.

There are no balloons allowed, didn't you get the memo?