More tax breaks for flood-hit producers

The Cabinet approved a Finance Ministry proposal to waive tariffs on goods imported by flood-hit manufacturers to replace those damaged in the deluge. The tax breaks, effective from January to June, are in line with a previous Cabinet decision to waive tax on machinery and vehicles.
The Cabinet also approved flood compensation worth a combined Bt1.37 billion to 273,422 households in 53 provinces, with each family getting Bt5,000. Ministers also agreed to pay compensation to 467,887 households in Bangkok worth a total of Bt2.34 billion, with each family taking Bt5,000.
Plodprasob Surassawadi, minister of science and technology, said the government and the committee on water-resources management had approved six more flood-prevention projects worth Bt7 billion. These projects would be implemented in June and July, he said.
The government will soon announce water-containment areas measuring 24,000 square km, he added.
The Cabinet has not yet decided whether to extend loan repayments from seven years to 15 years, as demanded by industrial park operators. The government also plans to partially subsidise the cost of dyke-construction projects to prevent industrial parks from flooding, but this has not yet been submitted to the Cabinet.
As the government plans to borrow a large amount of money to finance flood-prevention and other infrastructure projects, experts have voiced concern about mounting public debts.
Narongchai Akrasanee, a member of the central bank’s Monetary Policy Committee, warned that both private firms and the government must beware of piling up too much debt. He spoke at a seminar hosted by Krungthep Turakij newspaper.
“Don’t let debts catch us – macro-finance is very important,” Narongchai said, referring to the high debts accumulated by private firms leading to the 1997 Asian financial crisis. Americans spending beyond their means triggered the global financial crisis in 2008, and high public debt caused the debt crisis that is currently gripping the euro zone, he said.
Thailand and other Asian countries need to rely more on local and regional demand and depend less on exports to the West, Narongchai said.
New factors such as the opening up of Burma would contribute to an economic strengthening of the region, he said.
Anek Laothamathat, a political scientist at Rangsit University, said people in the North, South and Northeast tend to think of themselves only in relation to Bangkok. He urged them to think about how they can connect their economies with those of other countries.
He also said it is worth reviving the idea of building a canal in the South of Thailand linking the Indian Ocean and the South China Sea (via the Andaman Sea and the Gulf of Thailand), as trade among Asian countries has increased significantly.