Public debt, false forecasts will put Thailand in crisis: Pheu Thai
Thailand is in a worrisome financial situation due to high public debt created by the government and its mistaken economic projects, a member of the opposition Pheu Thai Party warned on Sunday.
The concerns were aired by deputy Pheu Thai secretary-general Paopoom Rojanasakul, who is a member of the panel vetting the 2023 budget bill.
He said the ad hoc House panel has been scrutinising the bill for a week now and he has been able to pinpoint several concerns.
First off, he said, Prime Minister Prayut Chan-o-cha’s government has generated public debts worth 4.4 trillion baht, while there is another 1 trillion baht worth of debt not accounted for in the budget.
He said these hidden debts were incurred by subsidies offered to farmers and the amount was growing every year.
Paopoom said the subsidies were channelled through allocations given to the Bank of Agriculture and Agricultural Cooperatives, but there were no written records on how the money has been spent. Pheu Thai is demanding that the bank provide documents detailing the spending, he said.
Secondly, he added, the budget to service public debts has skyrocketed. According to the budget bill, the Public Debt Management Office will be allocated 192.13 billion baht to cover interest and loan fees, which is three times higher than the portion of the capital it has to pay back this fiscal year.
This shows that a lot of the taxpayers’ money will be used to service public debts, he said. Worse yet, he added, the government will continue creating public debts, and its recent borrowing will not contribute to the country’s revenue in any way.
The third issue, he pointed out, was that the proposed spendings by government agencies were based on daydreams about the economic outlook. While the panel sees a negative outlook, government agencies think otherwise.
“It’s like we’re living in different countries,” he said.
Paopoom added that the 2023 budget bill was based on projected GDP growth of 3.7 per cent. However, he said, these figures were calculated several months ago before many negative factors hit the country, such as rising inflation and the US Federal Reserve hiking policy rate.
Fourthly, he said, the Revenue Department has been missing its revenue target every month this year. So far, he said, it has missed the target by 26.5 billion baht.
What is worse, he added, is that the department will harm the investment atmosphere by going ahead with its plan to collect taxes from the trading of shares and digital assets, and not collect any inheritance tax.
The fifth point Paopoom said was the fact that state banks had failed to help small and medium enterprises as they should have done. Instead, he said, they were more focused on making profits and lowering non-performing loans.
The sixth, and most worrying sign, Paopoom said, was that this budget bill will create a deficit that will near the ceiling due to the government’s inflated figures of possible revenue and GDP. He said the situation would worsen if the Finance Ministry is forced to raise the policy rate due to external negative factors.