Forum urged tax and policy revamp for sustainable growth

Somchai Jitsuchon from the Thailand Development Research Institute, told the forum that tax and policy reform is the key to sustainable growth and blamed the Finance Ministry for failing to reduce economic inequality. 

The ministry’s tax policy has contributed to the increase in economic inequality and its distribution system largely ignores poor people who really need help. The Gini coefficient score of Thailand has gone up in recent years and is a clear indication that the ministry has failed to reduce and has even contributed to the increase in income inequality in this country, he said.

“The government is giving away too much of its budget to the people who don’t really need it,” he said. There are three groups that truly need financial help but are largely ignored by the government – mothers in poor communities, minimum wage workers and seniors. 

The government has to help mothers in lower opportunity communities because the first five years of her child’s life is the most important period of youth development. The government should provide funds to support child education and healthcare while building more and better quality public child centres, which would allow stay-at-home moms to go out and look for extra income to help support their households while knowing that their children are well taken care of by a trained carer.

Minimum wage and low-income workers should receive extra benefits from the government to reduce their financial burden. The elderly and retirees should also receive further financial help from the government through exceptions in public services because of the higher cost of living. Ekniti Nitithanprapas, deputy director-general of the Finance Ministry’s Fiscal Policy Office, said there are four policies that should be implemented to achieve equally distributed and sustainable economic growth. 

The first is to find out who are the real “poor” in this country and target its resources to help them first. The second is to provide financial help up to point. For example, if the economy is already growing at a stable rate and people are making more money, there is no need to keep up with its financial aid. 

The third is, in case of a financial crisis, to be able to implement an emergency policy to help combat the situation instead of having to wait around for politicians to debate whether it should be implemented. The last is If there is transparency, there is less corruption and more money will get into the hands of the poor.

Sutapa Amornvivat, chief economist of Siam Commercial Bank, said one of the biggest problems for growth in this country is the clear lack of quality and trained labour.

The shortage of efficient labour in some market is caused by a higher mortality rate, increased number of unregistered workers outside the system and employment problems.

“In the past 10 years, less people, mostly graduated students, are joining the registered workforce because they are not motivated to do so. It is less attractive for them. We have to change this mind-set and try to encourage untrained but highly educated workers to join the registered workforce to transform them into trained and effective workers. Companies should provide training programmes for new graduates and the government should help promote it,” she said. 

Thanee Chaiwat, an economics lecturer at Chulalongkorn University, said the problem of development in Thailand is the lack of trust in society. If the people living in society trust each other, there will be less corruption and long term it will be easier to sustain development since people can work together under a collective goal. 

The government should improve the level of trust in society by promoting plurality and comradeship in schools. Decentralisation is also another way to create trust since it allows people in their community to govern themselves. People should form unions within their community to open up group investment opportunities to enhance their productivity. 

Korbsak Phutrakul, an executive vice president of Bangkok Bank, said the key to long and sustainable growth is a good economic structure. 

However, outdated laws are holding back the country’s development through judicial delays. 

“Old regulations should be updated to match international standards,” he said.