Does 2022 budget bill answer the country’s needs?
Critics say the 2022 budget bill scheduled for debate in Parliament next week has several flaws, ranging from the size of total spending to how it is allocated.
The 2022 fiscal year budget is worth Bt3.1 trillion, Bt185.9 billion less than the current 2021 budget.
The four ministries receiving the largest share are Education at Bt332.4 billion, Interior (Bt316.5 billion), Finance (Bt273.9 billion), and Defence (Bt203.3 billion).
Falling revenue means a smaller budget
The government has cut total spending for next year in an apparent effort to avoid breaching the threshold of 60 percent public debt to gross domestic product (GDP). Public debt is currently 54.3 percent of GDP. However, many critics insist the government needs to borrow more to deal effectively with the COVID-19 crisis.
“The government’s spending plan of Bt3.1 trillion is not adequate at a time when many people and businesses are suffering badly from the pandemic fallout,” said Thanathorn Juangroongruangkit, former leader of the disbanded Future Forward Party.
Somporn Isvilanonda, a senior fellow at the Knowledge Network Institute of Thailand, explained that the 2022 annual spending plan reflects the shortfall in government revenue caused by the impact of COVID-19.
He is also worried that reduced government spending on environmental issues will hurt Thailand’s commitment to the United Nation’s sustainable development goals.
The Thai economy contracted 6.1 per cent in 2020, hit by the first wave of infections early in the year and the second in December.
This week, the government abruptly announced an executive decree to borrow an additional Bt500 billion to combat the virus and its economic impact. It sparked widespread concern over the lack of transparency in spending, which will bypass the normal parliamentary scrutiny applied to annual budgets.
Govt’s latest COVID-relief loan triggers fears over transparency, public debt
The government opted for an emergency decree to sanction an extra Bt500 billion in borrowing after the latest wave of COVID-19 hit businesses and people already suffering from earlier outbreaks, killing chances of a quick economic recovery.
Labour, social welfare ministries lose out
Labor leaders complain that the government has allocated insufficient funds to the ministries of Labour and of Social Development and Human Security, who are having to handle severe impacts from the coronavirus outbreak.
“The Social Development and Human Security Ministry is allocated only Bt24.7 billion, of which Bt17.3 billion is for child welfare. We need another Bt15 billion to make child welfare universal,” said Sunee Chaiyaros, a teacher at Rangsit University’s College of Social Innovation.
Currently, families are entitled to a monthly living allowance of Bt600 for every child aged 0-six years, but the program only covers 2 million children out of the total 4 million-plus.
Sunee also complained that under the 2022 budget bill, funding for the Labour Ministry is just Bt49.7 billion, down from Bt 64.5 billion in the current fiscal year.
“The budget is too small given the huge task of supporting workers whose income has dropped sharply. Moreover, the ministry needs to support workers in the informal sector, the unemployed who may return to rural agriculture, and new graduates who are facing difficulty finding jobs,” she said.
The combined budget for both ministries is far lower than the Bt203.3 billion allocated to the Defence Ministry.
Lae Dilokvidhyarat, a labor economist at Chulalongkorn University, said he agreed with Sunee’s complaints “because we need to support workers through the Labour Ministry and those groups who are covered by the Social Development and Human Security Ministry”.
He echoed the point that the budget allocated to the military via the Defence Ministry should have been cut more, noting that the country was not at war.
‘Subsidising bloated armed forces’
Critics have long urged reform of the military by downsizing troop numbers, cutting generals, and abandoning mandatory service for Thai men.
Under the 2022 budget bill, the Defence Ministry’s spending on troops totals Bt105.1 billion – up from Bt103.3 billion in the current fiscal year.
“This means that spending on Defence Ministry personnel increased 1.7 percent, while the overall budget has fallen by 5.7 percent,” Decharut Sukkumnoed, a former Kasetsart University economics lecturer, wrote on Facebook.
In comparison, the Public Health Ministry’s staff budget is Bt115 billion, down 1.3 percent from this year, while the Education Ministry’s is Bt211.9 billion, down 6 percent.
“How come our country gives priority to military personnel rather than the public health and education workforce,” asked an exasperated Decharut.
Thailand’s household debt increased 3.9% to ฿14.02 trillion in Q4 of 2020 and will grow this year
Thailand’s household debt increased 3.9% to 14.02 trillion baht in the fourth quarter of last year, representing 89.3% of gross domestic product (GDP), said Mr. Danucha Pichayanan, secretary-general of the National Economic and Social Development Council, today. He noted that the increase, although at a slower rate, was in line with economic contraction and reflected public concern over creating new debt.
Demands to cut military spending
One opposition party is calling for a reduction in spending on weapons purchases.
Phicharn Chaowapatanapong, deputy leader of the Move Forward Party, has called for deeper spending on security affairs.
He pointed out that cuts in spending on the environment and public health amounted to 47 percent and 10 percent respectively, while security spending had been reduced by just 5 percent.
“The spending plan does not answer the current circumstances,” he lamented.
Under the 2022 fiscal bill, funds allocated to national defense and internal security are worth of Bt387.4 billion slightly down from Bt412.2 billion last year. Meanwhile, the environment-related budget has been almost halved, from Bt16.1 billion to Bt8.5 billion.
“The government still plans to spend about Bt10 billion on a submarine and ammunition, but this money should be used to aid people suffering the fallout from the virus outbreak,” he added.
Govt defends its plan
Government spokesman Anucha Burapachaisri said the opposition should not compare the budgets of the Public Health Ministry and the Defence Ministry, since the formerly contained agencies funded directly by the government rather than the ministry. He cited the Public Health Ministry’s National Health Security Office, whose Bt140 billion annual funding is drawn directly from the government budget.
The government has assured the public it has adequate financial resources to combat the virus and support people and businesses affected by the COVID-19 fallout.
The 2022 budget contains an emergency fund worth Bt89 billion to spend on virus-related issues. Spending under the 2022 budget will begin in October this year if Parliament votes the bill into law.
By Thai PBS World’s Business Desk