Dems skewer loan bill in debate
Abhisit questions government's ability to repay huge debt
- Published: 29/03/2013 at 12:18 AM
- Online news:
The opposition questioned the government's need to borrow two trillion baht for infrastructure megaprojects as the House began its two-day deliberation of the borrowing bill Thursday.
Prime Minister Yingluck Shinawatra takes notes as opposition leader Abhisit Vejjajiva, who appears on her monitor, addresses parliament during the House debate on the bill to borrow two trillion baht to finance infrastructure investment megaprojects. (Photo by Apichart Jinakul)
Opposition and Democrat leader Abhisit Vejjajiva also raised doubts about the government's ability to repay the debt and the transparency of the scheme, with the bill being submitted to the House without details of the transport projects.
The loan was unnecessary because the government could work out a budget deficit to fund the projects adequately, which would not risk breaching the public debt ceiling of the nation, Mr Abhisit said.
The government, he added, should not create an unnecessary debt burden and should use taxpayer money carefully.
Mr Abhisit said the money lost through the government's tax rebates for its first-car buyer scheme could have funded the construction of two electric railways while the lavish spending on the rice pledging scheme could have paid for other infrastructure projects.
Mr Abhisit questioned the government's ability to repay the debt of two trillion baht, plus three trillion baht in interest.
"We must repay five trillion baht altogether if the interest rate remains the same. If there are fluctuations, then repayment will not be completed within this life but in the next life," he said.
On the projects' transparency, the opposition leader said there was no information on how much it will cost for each kilometre of road and railway track being planned. He said if the projects were implemented under normal budgetary procedures, the House would be able to scrutinise such details.
"The borrowing was proposed to evade democratic examination under budgetary laws," Mr Abhisit said.
"It is undemocratic and it would create a financial burden without guaranteeing clear returns."
Mr Abhisit expressed doubts about the government's promise that spending on transport projects will be subject to public scrutiny.
He said the government had spent 120 billion baht on flood management projects but the spending could not be monitored. He also said the Pheu Thai Party had promised during its election campaign to refrain from borrowing, but it is doing the opposite now that it is in government.
Bhumjaithai MP for Nakhon Ratchasima Boonjong Wongtrairat said the borrowing contradicted the government's earlier promises to adhere to the sufficiency economy. He said the government had failed to elaborate on the sources of the income it would generate to repay the debt in 50 years.
The opposition MP urged the government to gradually implement infrastructure development projects.
"The government should withdraw the borrowing bill and conduct public hearings first," Mr Boonjong said.
Prime Minister Yingluck Shinawatra told the House the borrowing for transport projects is in line with policies on economic development and enhancing competitiveness.
She said Thailand had not developed infrastructure for a decade and its competitiveness has suffered as a result.
Ms Yingluck said developing the transport network under the 2-trillion-baht borrowing plan would distribute economic development to remote areas, ensure sustainable economic growth and transform Thailand into a regional hub.
"The investment over the next seven years will increase gross domestic product by 1 per cent and create 500,000 jobs a year," the prime minister said.
She also emphasised the need for the special loan bill, saying annual budgetary allocations could not guarantee the swift completion of infrastructure projects due to possible political changes in the future.
Ms Yingluck admitted the borrowing will initially increase public debt in proportion to the GDP of the country. But she said the bill will eventually generate income, raise GDP and thereby reduce the size of public debt compared to GDP.
Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong said the benefits from the investment will outweigh the costs of the loan and last for a century.
"The government will borrow mainly from local sources, so most of the 3-trillion-baht interest will remain in the country," he said.
Democrat list MP and former finance minister Korn Chatikavanij said although he personally agreed with the investment programme, the justification that the loan bill is needed to develop the country's transport and logistics systems is flawed.
It is wrong to seek the 2-trillion-baht loan by citing the country's low competitiveness ranking in the transport category in 46th place, Mr Korn said.
He said the government had failed to take into account the improvement of public utilities in Thailand.
Mr Korn said the country's competitiveness rankings in several categories are even lower than for transport.
He said Thailand ranked 71st in public health, while its education ranking was 89th, which reflects problems that need to be addressed urgently.
Speaking on behalf of Ms Yingluck, Deputy Prime Ministry Chalerm Yubamrung explained the reason for seeking the 2-trillion-baht loan, which is outside the annual budget.
He said only a small fraction of 18.7 per cent of the annual budget is earmarked for the investment programme. The borrowing is intended for long-term spending and future governments can continue to spend it, he said.
Responding to complaints of scant details of the projects, Mr Chalerm said the bill is only an overall strategy and it was just the first reading of the bill.
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Writer: Manop Thip-osod & Penchan Charoensuthipan