NCPO, please kill our subsidy culture: Thai opinion

[webfact]

STREETWISE
NCPO, please kill our subsidy culture
Achara Deboonme

BANGKOK: -- As Thailand enters its third week under military rule and pledges of reform, the National Centre for Peace and Order (NCPO) is being bombarded by requests and suggestions.

Here's my bombshell for the Generals - get rid of all subsidies.

Subsidies of all forms are naturally "immoral", as they distort the market mechanism and lead to irresponsible behaviour among the people involved.

Take the price of diesel as an example. Due to a resolution since May 2011 to maintain the pump price below Bt30 per litre, the number of diesel-driven pickup trucks has remained high, and would have done so with or without the first-car buyer scheme. In March, 34,813 ordinary cars were sold, compared with 40,797 pickup trucks. In April, the figures were 31,168 versus 34,383 units.

There are strong signs that the low pump price encourages the purchase of trucks. Who would want to drive a passenger car when petrol costs more than Bt30 a litre?

Meanwhile, waiving the excise tax on diesel cuts its price by Bt5.40 per litre but means the Excise Department is losing about Bt7.5 billion a month, or about Bt90 billion a year.

Compare that with the Bt51.8 billion that the 21km extension of the MRT Blue Line (Bang Sue-Tha Phra and Hua Lamphong-Bang Khae) will cost, according to the Mass Rapid Transit Authority of Thailand.

If we had resolved to spend the same amount on trains as we spend on diesel subsidies, we could have built many more kilometres of track by now. To be exact, the Bt277.5 billion spent on diesel subsidies between May 2011 and May this year could have financed the construction of 112km of electric train lines, based on Blue Line costs.

Just think of the better air quality that would come from getting more people off the road and onto convenient public transport - not to mention the contribution to the global battle against climate change.

Some say that scrapping the fuel subsidy would lead to rising inflation, given that transport of goods relies on diesel. Their fears are empty. Many logistics companies are now relying on gas, which is cheaper. And pickup truck owners nowadays are mostly city people who have nothing to do with transportation.

Personally, I hate it when a pickup driver overtakes my car at dangerous speed - I know he can only afford to burn that energy because of the subsidy.

I also get annoyed by farmers who hop on their trucks and head to Bangkok whenever agricultural product prices drop. Make it clear that subsidies will never be granted, and such protests would be killed at the root.

While I fully support the NCPO's decision to make long-overdue payments to the farmers for their crops, I strongly recommend that it kills the rice-pledging scheme, which has benefited no one in a sustainable way.

In the beginning, it looked good. Farmers were guaranteed Bt15,000 per tonne of rice, almost regardless of quality. Yet this scheme has smashed Thailand's rice industry. As global prices drop below Bt15,000 a tonne, there is no buyer out there to absorb Thai rice. We produce about 20 million tonnes a year, half of which is consumed domestically. Without buyers, our excess rice rots and loses any value. Releasing massive volumes of the stockpiled rice also depresses the price, which hurts farmers.

But this kind of subsidy seems to have deep roots in Thailand. I have plenty of memories of protests by farmers who cultivate other crops - rubber, tapioca, corn, pineapple, etc.

This week, you members of the NCPO will make a decision on how to help rice farmers. They have asked for a subsidy of Bt3,000 per tonne plus special assistance for production costs. But you should realise that if you say yes to the request, every farmer nationwide will demand same thing. You are not Santa Claus. Any money to be spent on subsidies is taxpayers' money. No matter how good your intentions, you will be forever remembered for sponsoring subsidies with somebody else's money.

I do understand that some people in our society do need some form of help. People are not born equal and not all people have equal access to government services. But if help is exclusively extended to farmers, what benefits are the relatively wealthy Thais who pay for the subsidies through tax entitled to? How can we make sure that taxpayers' money is fairly and equally distributed?

Other forms of subsidy need to be eliminated, too. Some politicians hire their children or relatives to work for them, then use official budgets to travel with them overseas. Shouldn't we have a rule that makes such appointments illegal?

In our culture of handouts, it will be hard work to kill all the free gifts. But if anyone has the power and support to do so, it is you, the NCPO.

-- The Nation 2014-06-10

[EricBerg]

"Just think of the better air quality that would come from getting more people off the road and onto convenient public transport"

In Thailand there is no such thing as convenient public transport.

..."- not to mention the contribution to the global battle against climate change."

"112km of electric train lines" would not have had much influence on global warning. Solving the Bangkok traffic jams would have more impact and boost economy.

[Oryx816]

If they open the door with one group, there will be a very lengthy "me too" line outside.

Education is the solution to most of Thailand's problems, not subsidies and handouts.

[UbonRatch]

"Just think of the better air quality that would come from getting more people off the road and onto convenient public transport"

In Thailand there is no such thing as convenient public transport.

Really? Never used the BTS or the likes of Nakhonchai Air Coaches? I'd say they're very convenient myself.

[EricBerg]

"Just think of the better air quality that would come from getting more people off the road and onto convenient public transport"

In Thailand there is no such thing as convenient public transport.

Really? Never used the BTS or the likes of Nakhonchai Air Coaches? I'd say they're very convenient myself.

You're right. The exception to the rule.

[rabas]

So, do you really, really, really, really, really want to know the root cause of the political problems that enabled corrupt politicians to take over government and steal the country blind? This....

If we had resolved to spend the same amount on trains as we spend on diesel subsidies, we could have built many more kilometres of track by now. Just think of the better air quality [...] not to mention the contribution to the global battle against climate change.

Personally, I hate it when a pickup driver overtakes my car at dangerous speed - I know he can only afford to burn that energy because of the subsidy.

Just forget the rural farmers who rely on trucks to get their work done and transport their families to town, oh and cheaper rice please. There is your highly feared elite, it is us. So it wasn't all the king's men and all the king's horses after all......

Edited June 10, 2014 by rabas

[selftaopath]

"Just think of the better air quality that would come from getting more people off the road and onto convenient public transport"

In Thailand there is no such thing as convenient public transport.

..."- not to mention the contribution to the global battle against climate change."

"112km of electric train lines" would not have had much influence on global warning. Solving the Bangkok traffic jams would have more impact and boost economy.

I agree with you. An aside: Air quality would be better if there was trash pick up in all Isaan villages and families stopped burning all their trash - including plastic. Oh and how a/b the farmers burning their fields yearly? Sorry a bit off topic. My bad.

[trd]

Right now, the junta is being seen as the solution to everything. But in the real world it is difficult to govern any country regardless of the flavour of its local politics. Do you see where this might go? Inevitably there will be failures and then there is the possibility of a backlash as a result of the unrealistic expectations of a population who see the junta as a breath of fresh air who can solve all of Thailand's problems. Given the sensitivity of the military and their reaction to and restriction of freedoms to what has hitherto been minor resistance to its authority, how is it likely to play out if dissatisfaction from the junta's failures becomes more vocal.

[chainarong]

Subsidy's are a false income, which generally props up some sort of enterprise that wouldn't operate without subsidy's, in other words they shouldn't be in that game , so the question is will this help or make things worse, in a country already at the worse end of the scale , you take the subsidy's away and you will have a lot of hungry, angry people in Thailand , the answer lies in the government introducing incentives like discount Power , Fuel , water, rates , fertilizer etc ,all means tested and transparency checks and balances, Thailand is not the same as Australia, farmers down under have no subsidy's except drought and flood aid and that is given on generous interest rate returns for repayments, at this time ,Thailand needs to help in particular the agriculture section, not hinder it.

[worgeordie]

Subsidies,Populist policies were a ploy by previous Governments

to use public monies to buy votes,and the sooner its stamped out

the better it will be for Thailand.

I just hope the army stays in power long enough,to root out all

corruption,bring the guilty parties to book,with real punishment

been dealt out,as long prison terms,NO suspended sentences,

and maybe Thailand can turn its self around.

regards Worgeordie

[wandasloan]

Right now, the junta is being seen as the solution to everything. But in the real world it is difficult to govern any country regardless of the flavour of its local politics. Do you see where this might go? Inevitably there will be failures and then there is the possibility of a backlash as a result of the unrealistic expectations of a population who see the junta as a breath of fresh air who can solve all of Thailand's problems. Given the sensitivity of the military and their reaction to and restriction of freedoms to what has hitherto been minor resistance to its authority, how is it likely to play out if dissatisfaction from the junta's failures becomes more vocal.

Nothing theoretical there. We know the answer to your trailing question. What has always played out so far is bloodbath. Seems that's quite a good bet for late 2014, early 2015 again. It has happened so often that is is actually pretty predictable. It's because the military, any military, only has one solution to EVERY problem it faces. There is nothing Thais about this fact, but it has been seen so often in Thailand because the military actually thinks, for reasons I cannot fathom, that it can run a country. It's the reason the military does NOT seize power in almost any other country.

But the army can do no such thing. It can subdue dissent, those who point out its flaws or argue with its policies. But of course it can only do that for so long.

The Royal Thai Army, even in the very few times it has set up a pseudo-civilian government, cannot bring itself to cede actual political power to even its own appointees. So the only way it can deal with disagreeing and/or disagreeable people, is to kill them. Which it has done over and over and over again, and you'd be foolish to bet against them not doing it again, especially since almost no one agrees with any of its stated policies so far, such as keeping Yingluck's train and anti-flood projects - and doesn't agree that six old men direct it all.

The one thing the Thai army has done for 41 years and probably will again is to unite about 95% of the country against it. Then comes the killing. Then comes the whole "back to square one" again.

Sad, really.

.

[chooka]

My toilet is backed up, can they send a team of engineers around.

[wandasloan]

Subsidies,Populist policies were a ploy by previous Governments

to use public monies to buy votes,and the sooner its stamped out

the better it will be for Thailand.

Are you sure? You want to pay for rice what it's worth? You want the trucks that carry that rice should buy diesel for what it's worth? You want an airport tax to pay for what happens there? You want 4,000 baht internet service (not counting the phone line you currently get for 107 baht because it's subsidised) and 40-baht postage. You want people to pay 50 baht per trip on the bus to work, and then point out to your business why they need a very substantial raise or you lose all employees?

Do you want to pay realistic visa fees so that the rest of Thailand isn't paying employees to do a job that doesn't seem to benefit them in any way? You want the payment system of the US and UK here - hundreds of dollars for every non-residence visa extension? Really? You sure?

You sure it's a "ploy"? Are you sure YOU don't benefit by hundreds and hundreds of carefully planned subsidies, currently in place? Are you dead certain you want complete cutthroat capitalism to rule every price in the country? Really sure? You can't go back once you get your way, so think it over, that's my advice.

Everyone wants the end of subsidies. Until it comes in YOUR door. An end to even half of Thailand's subsidies would impact your life in ways that would gobsmack the entire Official Thai Visa Economic Think Tank.

I just hope the army stays in power long enough,to root out all

corruption,bring the guilty parties to book,with real punishment

been dealt out,as long prison terms,NO suspended sentences,

and maybe Thailand can turn its self around.

regards Worgeordie

You want the military to interfere directly in the court system.

Good grief.

Why not just bring back the absolute monarchy and slavery? It would be far more attractive.

.

Edited June 10, 2014 by wandasloan

[kamahele]

While the author lambastes the subsidies that benefit those on the lower end of the income scale, I wonder how much the rich are scamming from the government through their own subsidies and non payment of taxes.

[aripengu]

The generals are very good at politics they have years of experience, I am very sure they will find the best of solutions, please don't comment about what they should do or not even if you are a relatively wealthy Thai.

[billsmart]

Subsidies should not be abandoned.

In a capitalistic-focused economy steeply progressive taxation, entitlements, public infrastructure projects and subsides are all necessary to redistribute wealth to counter the inevitable concentration of wealth among a few, and to focus public resources on social goals. This of course requires a democratically-elected government which represents the will of the people, all the people and not just the elite - in fact especially not the elite. I hope the military junta is able to design and implement reforms that will allow fair elections resulting in a truly representative government.

[Mango Bob]

I bet Achara Deboonme doesn't own a diesel vehicle.

[Lancelot]

I agree with the opinion, but good luck with that... People love subsidies and most countries have them.

But I am skeptical that lifting the diesel subsidy would suddenly convince truck drivers from "over taking"

[laocowboy2]

While I agree wholeheartedly with the premise (remove market-distorting subsidies), I find the arguments used very telling about both the writer and the 'Nation'. The figures for diesel subsidy are for the entire country but the suggested alternative use for funds is BKK-only. Typical of a certain way of thinking - why waste money on rural people that could be better spent on 'proper' Thais in BKK.

Better to remove all subsidies on fuel and agriculture and use the savings for properly-directed welfare transfers for the poorest and for better medical.

[thaiguzzi]

Author is a typical BKK Yellow shirt. How dare a farmer overtake ME in his pick up truck. Unbeknown to him, there is life and a country outside of BKK.

[robblok]

Subsidies,Populist policies were a ploy by previous Governments

to use public monies to buy votes,and the sooner its stamped out

the better it will be for Thailand.

Are you sure? You want to pay for rice what it's worth? You want the trucks that carry that rice should buy diesel for what it's worth? You want an airport tax to pay for what happens there? You want 4,000 baht internet service (not counting the phone line you currently get for 107 baht because it's subsidised) and 40-baht postage. You want people to pay 50 baht per trip on the bus to work, and then point out to your business why they need a very substantial raise or you lose all employees?

Do you want to pay realistic visa fees so that the rest of Thailand isn't paying employees to do a job that doesn't seem to benefit them in any way? You want the payment system of the US and UK here - hundreds of dollars for every non-residence visa extension? Really? You sure?

You sure it's a "ploy"? Are you sure YOU don't benefit by hundreds and hundreds of carefully planned subsidies, currently in place? Are you dead certain you want complete cutthroat capitalism to rule every price in the country? Really sure? You can't go back once you get your way, so think it over, that's my advice.

Everyone wants the end of subsidies. Until it comes in YOUR door. An end to even half of Thailand's subsidies would impact your life in ways that would gobsmack the entire Official Thai Visa Economic Think Tank.

I just hope the army stays in power long enough,to root out all

corruption,bring the guilty parties to book,with real punishment

been dealt out,as long prison terms,NO suspended sentences,

and maybe Thailand can turn its self around.

regards Worgeordie

You want the military to interfere directly in the court system.

Good grief.

Why not just bring back the absolute monarchy and slavery? It would be far more attractive.

.

Yes I want to pay the real prices of stuff.

You only tell one side of the story, the moment you cut subsidy you can also cut import taxes or fuel taxes.

Anyway yes cut the diesel tax his arguments are sound, and if you want to help the farmers / transporters give them acces to a certain amount of "red diesel"

If you pay the real deal other things get cheaper budgets will shrink.

Paying over the odds for rice was a stupid thing.

By cutting subsidies you cut out cost of the ones that administrate the projects, you get a less bloated government. You save costs in so many ways that life can get cheaper.

The problem is you can't steer an economy then as much as you want. But in case of Thailand it was used to buy votes.

[robblok]

Subsidies should not be abandoned.

In a capitalistic-focused economy steeply progressive taxation, entitlements, public infrastructure projects and subsides are all necessary to redistribute wealth to counter the inevitable concentration of wealth among a few, and to focus public resources on social goals. This of course requires a democratically-elected government which represents the will of the people, all the people and not just the elite - in fact especially not the elite. I hope the military junta is able to design and implement reforms that will allow fair elections resulting in a truly representative government.

Why redistribute wealth ? If what you are doing does not get you the money that you want change it.

I could make more money doing a shitty job with rotating shifts as what I do now. Else nobody wants to do those kind of jobs.

Farmers are not god, if they can't produce at a good price let them re educate themselves. Why should others pay for their faillure ?

If you don't then some will stop and prices of products will rise and the remaining farmers get more for their products.

Consumers will pay more at that point but they pay less tax, it should even out a bit.

This way farming stays innovative, now they don't change much and rely on others to bail them out.

[ericthai]

"Just think of the better air quality that would come from getting more people off the road and onto convenient public transport"

In Thailand there is no such thing as convenient public transport.

..."- not to mention the contribution to the global battle against climate change."

"112km of electric train lines" would not have had much influence on global warning. Solving the Bangkok traffic jams would have more impact and boost economy.

What are you talking about? In Thailand it is so easy to get anywhere. In Bangkok you have so many options. In Isaan there are buses and songtaws to get around. Go to Africa and see how easy it is to get somewhere. How about Australia if you don't have a car you have a hard time getting around. There are allot of places in the US too that if you dont have a car there is no way to get anywhere. I find Thailand one of the best places to be able to get around without the need for a car.

[Chris Lawrence]

This reporter sounds like a real <deleted>.

In another article she wrote "How Thais got into this polarised storm is almost beyond imagination." Well if she can't work it out, what got her the job? Just to turn a phrase and supply some figures don't make a jurno. You need to interpret this information, because if you don't the reader will.

If the young girl went to University to become a reporter, who built the university? Probably one of those speeding farmers at 300-400 baht a day.

I liked what Billsmart said "subsides are all necessary to redistribute wealth to counter the inevitable concentration of wealth among a few, and to focus public resources on social goals".

I wonder if this young girl would have the courage to look at the Armed services and the strangle hold they have on directorships of Thai companies while they sit and vote on the economy.

Looking at PTT this morning I could only get their 2008 annual report/directors/managemen/profit/loss. Is this what she meant about getting information from Thai companies? For a public company to have lack of current information on their web site shows contempt to the market place.

[Gunna]

"Just think of the better air quality that would come from getting more people off the road and onto convenient public transport"

In Thailand there is no such thing as convenient public transport.

Really? Never used the BTS or the likes of Nakhonchai Air Coaches? I'd say they're very convenient myself.

You're right. The exception to the rule.

Plus MRT

& Bus 389 Between Suvarnabhumi Airport to Pattaya & Jomtien

[robblok]

This reporter sounds like a real <deleted>.

In another article she wrote "How Thais got into this polarised storm is almost beyond imagination." Well if she can't work it out, what got her the job? Just to turn a phrase and supply some figures don't make a jurno. You need to interpret this information, because if you don't the reader will.

If the young girl went to University to become a reporter, who built the university? Probably one of those speeding farmers at 300-400 baht a day.

I liked what Billsmart said "subsides are all necessary to redistribute wealth to counter the inevitable concentration of wealth among a few, and to focus public resources on social goals".

I wonder if this young girl would have the courage to look at the Armed services and the strangle hold they have on directorships of Thai companies while they sit and vote on the economy.

Looking at PTT this morning I could only get their 2008 annual report/directors/managemen/profit/loss. Is this what she meant about getting information from Thai companies? For a public company to have lack of current information on their web site shows contempt to the market place.

I am in 100% agreement with her article. Most people who are not are probably not educated or have invested time in study. Education should be subsidized and free for everyone. After you educated yourself your on your own, you got a basis to succeed at that point.

Why should others then keep paying for your inability to succeed or make a living. If others do better as you so be it. There is nothing wrong with others who are smarter and better making more money. If everyone gets the same no matter what they contribute innovation would never be there. Why innovate or study if in the end your wealth will be redistributed. Why even put effort in your work if it does not matter.. for that matter why work at all.. Others can do that and you can get the money.

[xminator]

Why? So the rich can get richer? Subsidies is the cornerstone in any functioning society. The society should help when you get old. When you get sick. When you get stricken by Mother Nature. To make sure farmers can produce too much food, and not just enough food when the harvest is good.

Or is the future thailand where you can pile money in the bank, build a big house and laugh when your neighbours house get burned down, because hey, it didnt happen to me. If you look farther then your own nose you see where that Thailand is heading.

So to be part of the greater community called Thailand you pay taxes so Thailand can care for everyone.

[chotthee]

Every time we pump petrol, we are giving money to the LPG/LNG/Diesel users.

Even rich people buy Benz that run on Diesel & LNG, using my money.

[rreddin]

So, do you really, really, really, really, really want to know the root cause of the political problems that enabled corrupt politicians to take over government and steal the country blind? This....

If we had resolved to spend the same amount on trains as we spend on diesel subsidies, we could have built many more kilometres of track by now. Just think of the better air quality [...] not to mention the contribution to the global battle against climate change.

Personally, I hate it when a pickup driver overtakes my car at dangerous speed - I know he can only afford to burn that energy because of the subsidy.

Just forget the rural farmers who rely on trucks to get their work done and transport their families to town, oh and cheaper rice please. There is your highly feared elite, it is us. So it wasn't all the king's men and all the king's horses after all......

Sadly you are right. The OP is only about Bangkok people and the author has no care for the rest of the country. Nothing has changed with the coup. The real problem is still there and is not being tackled.

That being said, there is some merit in the suggestion of scrapping subsidies, but it is pie in the sky until there is a democratically elected accountable government that has a clear mandate to make these revolutionary changes. I doubt there is any political party that would seek election on such a mandate even if there was also a clear plan for a welfare system to protect the vulnerable in society.

In the meantime, there is plenty of fat in all government departments and quangos that can be trimmed and the savings made better used.

[UbonRatch]

Every time we pump petrol, we are giving money to the LPG/LNG/Diesel users.

Even rich people buy Benz that run on Diesel & LNG, using my money.

Buying a petrol or diesel car is a matter of choice, and not limited to elite cars, plus there is no or little difference in price.

If you bought petrol, that's your prerogative.

I drive petrol, by choice, for performance. I have no qualms paying for petrol, and I never consider I am giving money to gas/diesel users - that's just illogical.

Each to their own, I say.