6 June 2024

The Thailand Development Research Institute has criticised the Election Commission for its failure to check whether populist campaign policies, promised by political parties in their election manifestos, are worth the huge spending, confirming the sources of the funding for the policies and the potential impacts on the country’s fiscal discipline and public debt.

The country’s economic think-tank has made a number of observations about these policies. They say that some of the parties have not explained in their reports to the EC or to the public about the sources of funding needed to realise thepolicies, which would be a heavy burden on the state.

Several parties have announced that they will make use of the annual budget to implement their campaign policies, but have not specified which budgets will be cut in order to fund them,while some parties say they will source their funding from tax increases, but do not specify what taxes would be increased or by how much, said the TDRI.

Another observation is that most parties only talk about the positive aspects of their campaign policies, but do not mention the downsides or the high risks, despite the fact that the policies would require massive levels of funding.

Some parties have announced the sources of funding for each of their policies, but did not provide the whole picture, giving the public a false sense of security that there is enough moneyto fund all the policies.

The TDRI picked four parties, whose populist campaign policies require larger amounts of spending to implement than those of other parties.

The Bhumjaithai party, whose spending to implement its policies is estimated at about 1.9 trillion baht for four years, say the money will be obtained from sources outside the national budget at about 700 billion baht annually. This is to fund its emergency lending policy, such as a three-year debt moratorium, a fund to guarantee payment for damage caused to crops and free solar cells, among others, said TDRI, adding that the party has not provided to the EC sufficient details about these policies.

Regarding the Pheu Thai party’s 10,000 baht digital money giveaway to the 55 million Thais who are over 16, the TDRI said that the party claims that it would increase taxes and cut some overlapping welfare budgets to fund the policy.

The party did not, however, specify which welfare budgets will be cut, said TDRI, adding that the party’s expectation of higher tax collection is based on its over-assessment of economic performance.

The TDRI praised Move Forward as the only party that has clearly specified the cost of the implementation of its campaign policies and funding sources form the annual budget, which will not further burden the state coffers.

It noted, however, that some of the party’s policies, such as cutting the defence budget, are likely to meet with stiff resistance.

The think-tank said that the Palang Pracharath party is creating public misunderstanding about its policy to cut energy and fuel charges for one year, claiming that this policy can be done without using national budget.

The truth is that this policy, which will exempt excise tax on all types of fuel, will worsen the financial position of the Oil Fuel Fund, which is now running in the red to the tune of about 85 billion baht, and will result in increasing public debt, said TDRI.

So would the policy to exempt personal income tax for people who do not earn more than 500,000 baht a year, which will also impact the country’s fiscal position, it said.

On the Democrat party’s populist campaign policies, it said they only mention that the 460 billion baht of funding will not come from national budgets, but did not specify from where it will actually come.

The TDRI explained that the intention of this report is to encourage the EC to perform its duty, to regulate political parties and to make sure that they keep the public fully informed of their policies.

It also urged political parties to improve the standard of their reports, especially the sources of the funding for their policies,to show their respect for the public.

For future government coalition parties, the TDRI advised them not to rely too much on populist policies to stimulate the economy and to keep funds in reserve for a time when the economy is slowing due to global economic uncertainty.