Bonds to be issued to pay off rice losses
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First tranche set for early next year: Finance Minister Sommai
The Finance Ministry plans to issue long-term bonds with terms of three to 10 years to pay back losses totalling a massive Bt682 billion from previous governments’ rice-pledging policies.
“This will force the country’s fiscal budget into deficit for between three and five years from now,” Finance Minister Sommai Phasee said yesterday after a ceremony to open the Asean Sustainable Development Symposium 2014.
Previously, Thailand had planned to achieve a balanced budget by 2017.
“The budget deficit may be more than 10 per cent of the total fiscal budget – that will depend on the demand to raise capital for both investment and to pay back these losses,” Sommai said.
Normally, the country’s budget deficit is an average 10 per cent of the total fiscal budget. For example, in this fiscal year (2014-15) the total budget of Bt2.5. trillion targets a deficit of Bt250 billion or 10 per cent of the total.
Sommai said the country could not have a balanced budget in the next five years, as it needed funds to invest in infrastructure. A budget of Bt3.3 trillion has been set aside for the period 2015-2022 to develop society via outlays on education, health, and to raise funds to pay back the huge loss from the rice-pledging scheme incurred by previous governments.
Total losses of Bt682 billion have been incurred from the rice-pledging policies from 2004 until May 2014. Some Bt163.67 billion of this came from rice-pledging policies from 2004 until 2010, while the major chunk – Bt518.69 billion – came from 2011 until May 2014, overseen by former prime minister Yingluck Shinawatra’s government.
Sommai said the Finance Ministry would issue the first tranche of bonds to pay back losses from rice pledging in the first quarter of 2015.
“We cannot say [yet] how much bonds we will issue in the first tranche – that will depend on the deal to pay back debt in the first half of next year,” he said.
However, in August the Finance Minister approved the issue of new bonds worth Bt1.4 trillion in the 2014-15 fiscal year by the Public Debt Management office (PDMO), with Bt790 billion to pay back part of the current debt, losses from the rice scheme, plus Bt360 billion for investment in infrastructure, and Bt250 billion to cover the budget deficit.
Sommai added that restructuring the country’s tax system would also generate enough income for investment plans and to pay back debt over the long term.
“We will revise all of the tax system to be fair and also boost the country’s income enough for the nation’s finan?cial demand for investment in the long term. If we did not have a huge loss from the rice pledging it would have been better for the country to focus on investment,” he said.
Meanwhile, the National Anti-Corruption Commission (NACC) will use the Finance Ministry’s latest disclosure of information regarding losses incurred under the rice-pledging scheme of the Yingluck administration to press its case to the National Legislative Assembly (NLA) for impeaching the former premier.
The Finance Ministry revealed on Thursday that the Yingluck administration had incurred Bt518 billion in losses from four crops from 2011 to 2014.
NACC member Vicha Mahakun and NACC secretary-general Sansern Polchiak, who is in charge of the case, are expected to be the two members who will present the case to impeach Yingluck to the NLA although no final decision has been made yet.
