Economist says not enough being done to narrow income gap
An economist has suggested that political parties pledge if elected to increase the annual budget for social welfare by Bt350 billion in a bid to narrow the gap between rich and poor. Somchai Jitsuchon, research director at the Thailand Development
Research Institute, said on Friday that the government currently spends about 7.8 per cent of gross domestic product (GDP) on social welfare, much less than the 20 per cent average among other member-countries of the Organisation for Economic Cooperation and Development.
He recommended that the budget be increased to 10 per cent of GDP, or Bt350 billion, on top of current spending.
Speaking at a forum hosted by his institute, Somchai said the OECD had found that cash handouts narrowed the income gap significantly.
The amount underprivileged Thais collectively receive from the government – about Bt100 billion a year – is not large, he said.
And he suggested the latest handout, about Bt38 billion recently approved by the Cabinet, was politically motivated with the election scheduled for February.
Thailand needs to make it a policy that social welfare spending is continuous, not occasional, Somchai said.
The next government should reduce spending on the military so that more money can go to social welfare, he said.
A value-added tax may be needed to raise the social budget from 7 to 10 per cent, he added.