Thursday, February 27, 2020

Govt in disarray over 'further delay' to FY2020 budget

Jan 24. 2020
Deputy Prime Minister Somkid Jatusripitak
Deputy Prime Minister Somkid Jatusripitak
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By The Nation

A possible further delay to the passage of the budget bill for fiscal 2020 into law has sent the government into a panic mode, in fear of severe economic impact.

  The government has prepared a contingency plan should the budget bill face further delay due to legal issues, says officials.

   Deputy Prime Minister Somkid Jatusripitak on Thursday(January 23) admitted that the government did not know when the Bt3.2-trillion budget bill will become law and how much longer budget disbursement will be delayed after it has already been delayed for four months.

  His comment came after House speaker Chuan Leekpai submitted a request to the Constitutional Court, seeking its ruling on the verification of the bill after two Bhumjaithai MPs (Chalong Toedweerapong and Natee Ratchakitprakarn) were accused of casting their vote without being present during the voting process.

   The bill's passage was first delayed amid the political impasse after the general election in March, from its annual implementation in October. The government then expected it to be passed into law in February this year. The Thai fiscal year starts in October and ends in September.

  If the budget is put off again, it would delay public spending as a series of procedures have to be completed before budget disbursement could take place, Somkid said.  

  “The government may have just four months left for public investments, it could derail much of the planned projects. Such problem should have not occurred,” Somkid said in reference to the legal hurdle.

  When asked if the government would resort to issuing an emergency decree to jump start public spending, Somkid said it should not do so as the case had been forwarded to the Constitutional Court.

 Meanwhile, Director of Budget Bureau Dechapiwat Na Songkhla, said the government might run out of cash by March. 

  In the event of a delay to the passage of a budget bill, the government is allowed by law to spend in advance 50 per cent of the amount set in the bill. 

  In the past four months of delay, October to January, the government had  spent Bt1 trillion, leaving it a balance of just Bt500 billion in the absence of the FY2020 budget.  

 The amount may be enough to cover government expenditure until March before the coffers of state agencies dry up, he warned.

   The Budget Bureau will ask Prime Minister Prayut Chan-o-cha and the Cabinet to consider raising advance spending to 75 per cent of the total amount under the 2020-budget bill, he said, adding that it would allow the administration to carry on until May and avoid a potential government shutdown.   

  To lessen impact from the delay, the government plans to accelerate capital spending of Bt 223.3 billion and current spending items such as state officials' salary of Bt776.7 billion by the end of March, he added.

  Stock investors were also unsettled by the latest development, leading to share sales and a drop in the SET index.

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