The government is ready to take on more debt in its fight against the Covid-19 pandemic, by issuing an executive decree authorizing the finance ministry to borrow an additional 500 billion baht until September of next year to protect health public and revitalize the economy.
While new funds are generally welcomed as life-saving due to the severe impacts inflicted by the third wave, concerns about transparency and calls for sufficient oversight of the new loan are growing.
the Bangkok Post spoke to various groups of people about their expectations for the loan.
‘Count for each baht’
Mana Nimitmongkol, secretary general of the Anti-Corruption Organization of Thailand (ACT), approved the borrowing plan but stressed: “the government must ensure that every baht is spent for the benefit of the people.”
He said the money should not be spent on gaining political support as it would result in social divisions. According to him, disbursing funds through the government’s electronic wallet is an effective way to distribute the profits, although some people try to abuse it.
Mr. Mana said the participation of civil society networks in social and economic rehabilitation programs should be encouraged to ensure sufficient oversight.
He said that the disbursement of funds to fight the pandemic was mainly done through state agencies, adding that only three projects initiated by civil society networks had been approved, with a total value of less than 10 million baht.
“Engaging civil society networks not only promotes greater public participation, but also ensures that aid reaches target groups. This saves jobs and helps care for those who lose their jobs as a result. pandemic, ”he said. Without decentralization, transparency will remain a vulnerable point for the government, he said.
Target those who missed
Prinn Panitchpakdi, deputy leader of the Democratic Party and economist, said the focus was on how to spend the money efficiently.
He said the loan should not be spent on relieving hardship for people alone. In this new round of cash distributions, priority should go to those who did not get help in the last round, especially taxpayers in the entertainment, catering and service and tourism sectors.
As for reviving the virus-hit economy, the government should study what other countries have done.
For example, if the government plans to inject money to help SMEs, these companies should be required to help maintain their workforce and avoid soaring unemployment.
Spending on upgrading workers’ skills or retraining workers would be necessary during this time of disruption. “Another problem is quick disbursement, transparency and accountability. The government should disclose its spending plan for public and parliamentary scrutiny,” he said.
The Democratic deputy leader also echoed Mr Mana’s concerns about the criteria used to review social and economic rehabilitation projects.
“The criteria must be clarified and the objectives of each program specified. It is not enough to say that the projects are aimed at boosting the economy,” he said.
Mr Prinn said the Covid-19 pandemic is unpredictable and the 500 billion baht loan decree is needed to support the pandemic response.
Tax revenue collection is below target and the government cannot afford to raise taxes without adding pressure on the people and businesses struggling to survive, he said.
Mr Prinn also suggested that the government consider collecting taxes from online service platforms such as Google, Line and Facebook, paying only VIP value added tax (VAT).
SMEs “ should be at the center of concerns ”
Kla Party leader Korn Chatikavanij said it was obvious why the government needed to borrow another 500 billion baht, pointing to a budget deficit of 700 billion baht for fiscal year 2022.
He said that some projects such as Khon La Khrueng or Rao Mai Ting Kan, which are worth 600-700 billion baht, are money well spent, but he is not so sure about the other projects, several of which should have be financed through normal budget planning.
Mr Korn said the next round of financial aid should focus on SMEs that need help, but he noted that the government seems to be realizing this as a 170 billion baht fund is intended for safeguarding jobs.
“I think that this amount is likely to support measures aimed at reducing the financial burdens of SMEs. I hope so,” said the former finance minister.
Mr Korn said the government must also be fair in distributing aid to SMEs. While the government does not have to choose which companies to help, there should be a cap and sales volumes can be used to determine who should get help.
“How can we assess the impacts of the pandemic on each of the SMEs? I suggested that we use their VAT liability to determine this. Those who pay less VAT mean their sales have dropped and the difference in VAT liability before and after Covid -19, can be used to calculate the help they need, ”he said.
He said using VAT to assess impacts will encourage economic operators to register for VAT.
Expenses to prepare for the post-Covid
TDRI senior scholar Nonarit Bisonyabut expressed support for the loan decree to address the virus crisis and rehabilitate livelihoods during wave three.
He said it could take six months before the situation was brought under control and financial assistance would be needed for those affected by the outbreak. “The previous programs should be continued and the government could consider distributing money as some people need it to pay rent or other expenses that the e-wallet payment does not cover.”
However, he stressed that the government must also think ahead and plan how to improve competitiveness after the Covid-19 pandemic subsides.
Suntaree Sengking, of the Foundation for the Promotion of Work and Employment, said the government has focused its resources on tackling Covid-19 and failed to address issues faced by farmers such as falling prices or lack of distribution channels due to foreclosure measures.
On the new loan decree, Ms. Suntaree called on the government to collect public feedback and use it to design new relief programs. She also said it was high time the government considered suspending the debt of people whose livelihoods are devastated by the epidemic. “Some people have lost the tools they use to make a living. They see their vans and motorcycles seized by lenders,” she said.
Manit Promkareekul, chairman of Thailand’s Automobile Labor Congress, said impacts on the industrial sector are likely to be limited, but the tourism sector and those affected by work-from-home measures will be hit hard. He said the loan should be used to solve problems faced by farmers and help them improve productivity and provide distribution channels.