Rethinking welfare: How much can we really afford?

When Thailand was still a relatively low-income country, the government provided welfare assistance only for the needy. 

However, as Thailand’s economy has improved, it has striven to ensure that all citizens are entitled to state-provided welfare such as medical care and education. 

In the late 1990s Thailand promised free education for all, in the 2000s it launched a universal healthcare scheme, and in the 2010s it began handing out monthly subsidies for all elderly people. 

While no one wants to refuse welfare, there are growing concerns as to whether Thailand’s coffers can really afford such a provision of welfare. 

Given that the country has a limited budget, wouldn’t it be better to spend money only on those who need it? According to the Fiscal Policy Office, about 20 million Thais qualify as poor. If 20 per cent of those are elderly and the monthly subsidy for the elderly is fixed at Bt600, the country would need to pay just Bt28.8 billion a year. But because the government now pays monthly subsidies to all the elderly, the budget for the subsidy is no less than Bt60 billion annually. 

Many economists have pointed out that if the government continues such a universal approach, with the elderly of rich families also enjoying subsidies, such a welfare provision would not be sustainable. 

On those grounds, senior government figures have recently suggested the elderly subsidy would be only directed towards the needy. For example, any elderly person who earns more than Bt9,000 a month or has more than Bt3 million in assets should not be entitled to the subsidy. 

The government would then have more money to help people in need. Instead of just handing out subsidies, the government might open more elderly homes – which means the most to many people in frail health and in the final phases of their lives. Across Thailand, many elderly people pass away while still on the waiting list for state-run elderly homes.

Many economists have suggested that such problems would be reduced if the government learns to manage its budget more efficiently and to stop the more populist universal approach. 

In many economists’ eyes, helping only those in need should also apply to the state provision of education and healthcare as well. 

Their advice has not fallen on deaf ears as the government started registering low-income people in mid-July. 

By the middle of this week, more than 4.12 million people will have come forward for state welfare with registration ending today. 

The government has said that the registration will allow relevant agencies to design welfare based on the actual needs low-income people. Not all people should be entitled to free bus or train rides, which instead would be allocated to people who have low-income cards, according to the government. 

Finance Minister Apisak Tantivorawong has said registered individuals would get more welfare than people who have not registered. 

“For example, we may give them a 50-per-cent discount on cooking gas and tap water services,” he said. 

While such promises sound good, critics have raised concerns that the poor will be stigmatised and people’s rights will be affected. 

These critics have said the state budget should be used efficiently, but the government had a duty to provide basic welfare for its citizens, particularly in regards to healthcare and wellbeing. Both sides have good reasons. For Thailand now, the most important thing is to find the right balance in preparing a state budget. 

Let’s provide for the very basic welfare for all. Anything further than that should be provided only on the basis of neediness.