Described by Prime Minister Prayut Chan-o-cha as an important tool in "laying out the foundations for national progress and solving the country's problems", the passage of the 2021 Budget Appropriation Bill, undergoing its second and third readings in the Lower House since Wednesday, is well on its way. However, it's enforcement is likely to be delayed by a month.
The 3.3-trillion-baht budget bill passed its first reading in the House in early July after a three-day debate with a 72-member vetting committee formed to scrutinise the bill. The opposition vowed to scale back funds earmarked for non-essential construction projects and defence spending, and divert them to address the Covid-19 crisis and its economic fallout.
After weeks of examination, the committee headed by Deputy Finance Minister Santi Promphat came up with a revised budget bill which saw a cut of about 14 billion baht overall, but more allocation of funds to the health, interior, education and justice agencies.
The committee said revisions were made based on economic and social development plans, government policies, cost-effectiveness of proposed projects and the spending efficiency of the previous fiscal year budget.
The committee increased the budget for the ministries of Public Health and Interior and the Equitable Education Fund and the Court of Justice by a combined amount of 17.9 billion baht.
It slashed the budget for 27 agencies, with the Defence Ministry facing the biggest cut of 7.7 billion baht. The proposed cut includes delaying the 22.5 billion baht for the navy's Chinese submarine procurement scheme, which came after approval from Gen Prayut.
The proposed central fund, set at 614.6 billion baht, was not revised by the committee. The spending list included 40.3 billion baht earmarked for Covid-19 relief schemes, 6 billion baht for natural disaster relief spending, 2.5 billion baht for royally initiated development projects, and 99 billion baht for emergency spending.
Panel members spent a good amount of time defending their proposed cuts and increments before they voted to trim the budget to 3.28 trillion baht.
Palang Pracharath (PPRP) list-MP Wichian Chaowalit, the committee's deputy chairman, defended the allocation of the central budget, saying it was by the book and in line with fiscal discipline. Watana Muangsook, a committee member and a key Pheu Thai politician, raised concerns about an increase in fixed expenses, which was greater than investment spending, and called on the state to revamp the fixed expenses.
He pointed out the revenue collection, which was likely to fall short of target this year, to underline his point. If the spending structure was not addressed, the country would face what he called fiscal bankruptcy.
He said the state made a deficit budget of 3.2 trillion baht with projected income at 2.7 trillion baht in the 2020 fiscal year. The revenue collection in July was 267.8 billion baht below the target, and by the end of this month, it was estimated the collection would be 350 billion baht below the target.
Considering this year's situation, Mr Watana said revenue collection was likely to fall short of target in the 2021 fiscal year. With the budget deficit set at 623 billion baht yet allowed to reach 739.2 billion baht, the government would be able to borrow just 100 billion baht to offset the deficit, he said.
"The cabinet recently gave the green light to the Public Debt Management Office to borrow 214 billion baht, so the House committee needed to sound the alarm for the fixed expenses especially those by the armed forces," he said.
Addressing the House during the second reading the budget bill, Pita Limjaroenrat, leader of the Move Forward Party, said the revised plan failed to meet the needs brought by the crisis, and some budget cuts were not "real", only postponements.
He expressed concerns about a 4% increase in public salaries, saying it ran counter to the downsizing of the state sector. In the plan, the salaries and related expenses accounted for 1.1 trillion baht or one-third of the total spending.
He said the state failed to compensate losses of revenue for local administrative organisations (LAOs). The income dwindled after the state ordered LAOs to slash land and building tax by 90% to alleviate impacts of Covid-19.
He said the committee allocated an additional amount of 10 billion baht to local administrators but noted it was for 5,900 entities only where there are about 7,800 local bodies nationwide.