The Srettha Thavisin government wrapped up its policy statement, without clarifying how it would put its 10,000-baht digital wallet, a flagship election campaign promise, into practice and how it would prevent financial woes if things go wrong.
The scheme, a one-time giveaway for every Thai citizen aged 16 and over, could cost up to 560 billion baht or more. The government designed the scheme which is to be launched as early as February as a short-term economic stimulus.
In what is seen as hard sales marketing for the scheme, the government predicts bigger cash flow, accounting for 1.5 trillion baht, and a jump in GDP growth to 5-7% next year -- a great leap forward, if achieved, as the GDP growth now stands at only 2.7%.
However, Move Forward Party deputy leader, Sirikanya Tansakul, questioned the practicality of the scheme, especially the source of the funds. Calling the plan poorly thought out, she is not convinced the government's revenue stream can cover the digital wallet.
Previously, the Pheu Thai Party told the Election Commission the scheme would boost demand and spending and the government would in return earn more tax revenue.
When presenting the policy statement to parliament, PM Srettha dismissed concerns the government would breach financial discipline. Instead, he said the government would maintain its ability to pay its dues.
His assurances are not very convincing. Government debt has already exceeded the 60% ceiling, meaning the government should not borrow more.
There are concerns about the scheme coming at the wrong time, given that the economy has already begun to recover, albeit slowly. The fear is it could end up as a financial burden instead.
Ms Sirikanya warned that only 400 billion baht remains in the state coffers for the 2024 fiscal year. Moreover, the government needs to allocate a budget for other investment projects. She said that in implementing the ambitious scheme, the government may have to take out loans or sell its Vayupak Fund -- an act that would unjustifiably compromise financial discipline.
The digital wallet brings the controversial rice pledging scheme of the Yingluck Shinawatra administration to mind -- a distorted marketing mechanism, resulting in heavy damages.
In response to the opposition's questions, Deputy Finance Minister Julapun Amornvivat said the government needed more time to work on funding details. He merely said there would be no additional loans to cover the scheme.
This is not a good start for the new government. It gives the impression the scheme is being rushed, which is contrary to what the party had said during the election campaign.
Some academics have warned about the scheme's shortcomings, such as a bigger deficit and bad debt. They also said that while the scheme may help boost the economy, the impact would be short-lived. By this time, the government may find itself penniless as financial resources quickly dry up.
The Srettha government should take those warnings seriously to make sure the money scheme can really jump start economic growth and not be a populist ploy to appease voters.
If not, the budget should be used for projects with long-term benefits, like improving labour skills, which would help more than 4.4 million people living below the poverty line.