Government borrowing to fund populist schemes must be examined by parliament to ensure transparency, says the National Reform Council (NRC) panel on economic, monetary and fiscal reforms.
Somchai Ruchupan, chairman of the NRC's committee, said the measure has been proposed out of concerns about fiscal discipline as most populist schemes fail to state their sources of funding.
He said when it is time to implement such populist projects, the government tends to borrow, largely from state-run banks, and put stress on the state's fiscal discipline. Parliamentary scrutiny of government borrowing plans to finance populist projects will help control spending and make sure populist projects do not damage the economy, Mr Somchai said.
He also said the committee has proposed guidelines for public spending approval. It says the spending plans that respond to national administration strategy should get top priority.
Mr Somchai said the panel has also agreed that tied-over spending plans should not exceed five years. Those that need more than five years to complete are mega-infrastructure schemes such as rail development systems. He said if the proposal is adopted, laws on public expenditure will need to be amended.
Speaking after meeting the NRC's panel, Budget Bureau director Somsak Chotrattanasiri said the two bodies discussed a plan to set a ceiling for off-budget spending to fund populist policies. He said spending limits are necessary to maintain fiscal discipline.
Mr Somsak said his office has also proposed legal amendments seeking to enable the Budget Bureau to authorise fixed spending plans in case of a political crisis. He added that tax reforms are being considered to enable local administrative organisations to collect taxes for local development as part of efforts to promote decentralisation.