New government faces tough policy choices

New government faces tough policy choices

FPO says B100bn needed to fulfil vows

More than 100 billion baht a year is needed to fund welfare schemes vowed by the new government, according to Fiscal Policy Office (FPO) estimates.

A poster for a Palang Pracharath candidate during the election campaign. The party and its governing partners have many promises to keep. PAWAT LAOPAISARNTAKSIN

The actual welfare spending, however, will hinge on the coalition government's final decisions, taking into account the available budget and the scope of assistance provided, said director-general Lavaron Sangsnit.

Take the old-age living allowance as a prime example. Policymakers must consider whether they will offer the 1,000-baht monthly living allowance, a key campaign promise, either across the board or only to low-income earners, Mr Lavaron said.

The basic welfare benefits for 14.5 million smartcard holders will not be stalled, he said, while additional welfare provided under economic stimulus measures, including an extra 200 baht a month allowance for the disabled and a subsidy hike to 500 baht a month for goods purchases at Thong Fah Pracha Rat shops will end after they lapse.

The basic benefits are a monthly living allowance of 200-300 baht for spending at Thong Fah Pracha Rat shops, a discount for cooking gas purchases, and a 500-baht-a-month fare subsidy for public buses, trains, intra-provincial buses and electric trains.

These core benefits can proceed indefinitely because the cabinet's 2017 resolution did not set an expiry period, Mr Lavaron said.

The assistance measures cost the Pracharat fund 3-4 billion baht a month, he said, adding that 18 billion baht worth of the fund's available capital is sufficient to finance the aid in the event that annual budget expenditure is 3-4 months late from the start of fiscal 2020.

Even in the worst-case scenario that the fund's money is no longer available, such assistance can be maintained by using this fiscal year's budget framework for disbursement, Mr Lavaron said.

In related news, the FPO plans to propose guidelines for a new round of registration for the welfare smartcard scheme, tweaked for compliance with the government's campaign promises.

The military-led government already spent 140 billion baht on the state welfare scheme for low-income earners through the Pracharat fund.

A source at the Finance Ministry said the Palang Pracharath Party's populist promises include a 10-month subsidy for welfare smartcard holders of 100 baht a month for tap water bills, 230 baht a month for electric bills and 400 baht a month for rent; a coupon to buy equipment for the elderly; a monthly 1,000-baht old-age living allowance; and a monthly 500-baht allowance to buy goods at Thong Fah Pracha Rat shops.

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