State vows to roll out third phase of co-payment scheme

State vows to roll out third phase of co-payment scheme

The government pledges to roll out the third phase of the co-payment subsidy scheme, possibly in the third quarter, but must first tackle the scheme's loopholes that are open to fraud and re-evaluate the scheme's efficacy in stimulating spending and the overall economy.

Finance Minister Arkhom Termpittayapaisith said before the launch of the new phase of the scheme the ministry needs to thoroughly reassess whether existing phases of the scheme could boost the economy and consumption.

"We would like to ask people to wait for a while until the existing phase expires and the Finance Ministry re-evaluates the scheme," he said. "Many people are asking for the scheme's continuity, but the scheme remains tainted with fraud by a handful of unscrupulous people. The Finance Ministry, therefore, needs to close such loopholes and take legal action against cheating shops that participated in the state subsidy scheme."

The government in February cut off 45 low-priced Blue Flag stores from its financial relief schemes after they were found to be breaching the conditions. Following investigations by the Commerce Ministry, the shops were found to have taken advantage of the government-sponsored schemes by unfairly raising the prices of products, displaying no price tags and swapping the state subsidy for cash.

According to Mr Arkhom, the Finance Ministry also needs to wait for figures about consumer consumption in the first and second quarters to see how far the government's existing stimulus measures such as the co-payment subsidy scheme, We Travel Together tourism stimulus programme and Rao Chana (We Win) financial aid scheme could boost consumption and the overall economy.

He said funding for the third phase is likely to stem from the 1-trillion-baht emergency loan decree, particularly the portion of the 400 billion baht allotted for economic and social rehabilitation which still has around 200 billion left.

The remaining 200 billion baht for economic rehabilitation could be allocated for programmes designed to ease people's plight from the pandemic, said Mr Arkhom.

Under the co-payment subsidy scheme, the government pays for 50% of food, drink and general goods purchases of up to 150 baht per person per day, capped at 3,500 baht per person for a specified duration.

The first phase of the scheme started on Oct 23 and ended on Dec 31.

The government allocated 30 billion baht for the first phase, covering 10 million people, with each receiving a 3,000-baht money transfer.

The second phase, which started on Jan 1 and ends March 31, covers an additional 5 million people, with the subsidies raised to 3,500 baht per person.

According to the Fiscal Policy Office (FPO), between March 21 and Oct 23 last year when the scheme kicked off, spending in the co-payment scheme (both from the subsidy and out of pocket) amounted to a combined 98.8 billion baht.

Kulaya Tantitemit, the FPO's director-general, said on Monday the scheme has been highly successful in promoting domestic consumption and economic rehabilitation, with low-income earners and small-scale retail shops nationwide greatly benefiting. There are more than 14.79 million eligible recipients and 1.5 million outlets participating in the scheme.

Of the total spending, the state subsidy was worth around 48.2 billion baht and 50.6 billion was out of pocket.

The five provinces that saw the highest spending were Bangkok, Chon Buri, Samut Prakan, Songkhla and Chiang Mai.

With the scheme scheduled to end on March 31, Ms Kulaya urged eligible people to use up their subsidy by March 31 this year.

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