Employers urge new debt measures

Employers urge new debt measures

Office workers walk on Silom Road in Bangkok. An employers group is pushing for debt relief for middle-income earners. (Photo: Somchai Poomlard)
Office workers walk on Silom Road in Bangkok. An employers group is pushing for debt relief for middle-income earners. (Photo: Somchai Poomlard)

The new government should speed up efforts to reduce high household debt and help middle-income earners, not only farmers, as the former are also shouldering huge financial burdens, says the Employers' Confederation of Thai Trade and Industry (EconThai).

"Measures such as debt suspension must cover various groups of people who need help, no matter whether they are farmers, small and medium-sized enterprise owners, or middle-income earners," said Tanit Sorat, vice-chairman of EconThai. "The debt suspension should cover both principal and interest."

Mr Tanit made the comment after the cabinet decided on Sept 13 to approve a new debt moratorium for farmers and small businesses for three years.

The cabinet plans to release more details on this debt relief plan after the Finance Ministry finishes a 14-day study on the measure.

He said the middle class also need debt relief because they represent a large group of debtors struggling to deal with payments for credit cards, mortgages and car financing.

The government should pay attention to their problems because 4.5 million middle-income earners pay tax to the government, helping to build the Thai economy, said Mr Tanit. Without state assistance, many of them are likely to have their cars or houses confiscated next year, he said.

Thai household debt exceeds 90% of the nation's GDP, while public debt is at 61% of GDP this year.

EconThai shares the same concern as the Federation of Thai Industries about higher interest rates following the Monetary Policy Committee voting unanimously on Aug 2 to raise the policy rate for a seventh consecutive meeting by 0.25 percentage points, rising to 2.25%, the highest level in nine years.

Central bank governor Sethaput Suthiwartnarueput said the regulator will ensure its policy rate is appropriate and does not lead to financial imbalances.

During the recent policy statement announcement in parliament, Prime Minister Srettha Thavisin also promised to work with representatives of employers and employees to consider increasing the daily minimum wage to 400 baht.

The proposal is opposed by EconThai because it may force businesses that cannot afford to pay a higher wage to resort to layoffs.

The current daily minimum wage in Bangkok is 353 baht, while workers in Chon Buri receive 354 baht a day. Workers in other provinces receive lower rates.

Mr Tanit also warned the government on adopting the Pheu Thai Party campaign pledge of a 25,000-baht salary for university graduates with bachelor's degrees. This pledge may cause students to opt for university study instead of going to vocational schools to receive the new salary rate after graduation, he said.

"The Thai labour market needs technicians graduating from vocational schools rather than university graduates to serve new investment in S-curve industries such as electric vehicles," said Mr Tanit.

The 25,000-baht pledge could also cause some companies to delay hiring new graduates to avoid higher operating costs, he said.

Do you like the content of this article?