Politicians must check their promises

Politicians must check their promises

A man stands near electoral campaign banners posted on electric poles along Sutthisan Winitchai Road in Bangkok. (Photo: Nutthawat Wicheanbut)
A man stands near electoral campaign banners posted on electric poles along Sutthisan Winitchai Road in Bangkok. (Photo: Nutthawat Wicheanbut)

As political parties step up their election campaigns, with each of them rolling out a plethora of populist policies, concerns have arisen over the long-term budget burden if the poll winners translate these policies into practice.

Such concerns are valid given that almost all the parties do not mention the sources of the budget in implementing those policies. Politicians vaguely pin their hopes on the tourism industry, which has rebounded after the country tamed the Covid-19 pandemic.

It is undeniable that those in the coalition government are making use of existing mechanisms to secure their returns. A glaring example of this is the payment increase for health volunteers and members of tambon administration organisations, those who are close to the grassroots base.

To start with, the Palang Pracharath Party (PPRP) has made a big promise to the elderly to increase the monthly payment for those aged 60–69 years old from 600 baht to 3,000 baht. The rate will be progressive: 4,000 baht a month for those aged 70-79 and 5,000 baht for those who are 80 and older. It also aims to boost the welfare card from 300 to 700 baht.

The United Thai Nation (UTN) Party of PM Prayut Chan-o-cha is using the same tactic, promising to increase the amount in the welfare card to 1,000 baht, the tourism subsidy package as well as the 50:50 co-payment scheme and the elderly's monthly payment.

Bhumjaithai, a major coalition partner, entices voters with a three-year debt moratorium, among other things.

Eventually, all politicians will make it like a numbers game, competing to make voters swoon with more money: Pheu Thai pledges to increase the minimum wage to 600 baht per day; the PPRP promises to add 700 baht to the welfare card, while the UTN vows 1,000 baht, and Thai Sang Thai pledges a 3,000-baht monthly payment for the elderly.

Take a look at campaign posters and see the big numbers alongside candidate images. All the parties are trying to convince voters of their intentions and ability to fulfil their promises. If so, the prospective budget burden is more than worrisome.

We already have lessons from doubtful populism, state subsidies (village fund, housing for low-income people) and debt moratoriums. The successful universal healthcare system, initiated by the Thaksin Shinawatra administration, has become a permanent policy as no party dares to abolish it.

The same thing happened to the Prayut government's welfare card. Any party that wins the poll will have to keep this policy even though it is aware that the scheme cannot eradicate poverty, despite the huge amount of budget -- more than 280 billion baht during the period of five years after it was implemented or 56.3 billion baht per year. There is a major underlying problem: Those who are poor have no access to the scheme. Yet, the government announced it is to add 14.6 million cardholders this year.

Somchai Jitsuchon of the Thailand Development and Research Institute (TDRI) singled out the scheme's key drawback: A large number of poor people, 51%, cannot access the scheme. This means out of 100 poor people, only 49 can obtain the card, while the rest are out in the cold.

Yet the PPRP and UTN vowed to give more.

That would place a massive burden on the country's fiscal budget. If the card value is increased to 700 baht, as promised by the former, and to 1,000 baht, by the latter, the total budget will rise enormously from 130 billion baht to 180 billion baht. This is almost the same amount as the budget for the universal health care scheme, which is 204.1 billion baht this year. Needless to say, if either of the two parties makes it to Thai Khu Fah, it will be a spendthrift.

It's ironic that the Prayut-led junta was harsh against populism. The junta, in its 2014 interim charter, prohibits populist projects that will have a long-term impact on the country. Gen Prayut himself spoke ill of those politicians all the time. Yet, when bracing for a fierce political battle, he just practices the pot calling the kettle black.

More importantly, the current charter requires political parties to show accountability when promoting policies to ensure that they consider efficiency/risk analysis. The Act on Political parties also highlights this requirement, as it demands all the parties to state the sum and the sources of budget for each of their major policies, with a cost-benefit as well as a risk analysis.

In fact, according to Section 258 (3) of the supreme law, the Election Commission may slap a hefty fine against any party running a poll campaign without providing such data, a maximum of 500,000 baht and another 10,000 baht a day until they behave. But in practice, the EC has never released any reports about this. Is this negligent?

Therefore, almost all the parties fail to mention the source of income (tax increases or cutting the budget from other policies). Some only mention it broadly or make use of the "if'' condition (that those policies will be carried out if the economy grows favourably). Despite such blatant breaches of the law, the EC only turns a blind eye.

It's true that the Prayut government, through loans, spent a huge sum of money tackling the impact of the pandemic, as well as assisting marginalised groups. Some schemes, like the 50:50 co-payment package, are needed to stimulate the economy. But we must be aware of the fact that such spending is a burden to the budget and that the public debt of the country accounts for 60% of GDP.

Now, major think-tank agencies like the state Office of the National Economic and Social Development Council (NESDC) and TDRI have expressed concerns over the flagship populist policies.

The NESDC, in particular, warns that debt moratoriums will do no good to spending discipline, and there is a possibility that household debt will go up. More importantly, there are signs of a global economic slowdown which will see exports shrink significantly. The prospects are not good given that, due to the political timeline, it will take some time before the government is formed and that means the 2024 budget will be delayed.

The TDRI, meanwhile, is cautious about the long-term impact of some questionable populist policies, in addition to public spending discipline. If the spendthrift parties take office, they will need more than a two trillion baht-a-year budget to implement their policies. The concerns are even more serious, given that those policies mostly deal with immediate problems rather than boosting the country's competitiveness in the long run.

The TDRI worries that erring populist policies may snowball into a financial crisis, like during the early period of the Prem Tinsulanonda government in the early 1980s. In recent history, it's the same blunder that left quite a few Latin American countries in deep trouble.

Chairith Yonpiam

Assistant news editor

Chairith Yonpiam is assistant news editor, Bangkok Post.

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