CDC attempts to safeguard state budgets

CDC attempts to safeguard state budgets

Sources, loan costs must be transparent

Charter drafters have agreed to include new conditions for managing state budgets and finances in the constitution, to improve the transparency and accountability of government spending.

The first principle will force the government to declare where budgets come from and where they will go, said Kamnoon Sithisaman, spokesman of the Constitution Drafting Committee (CDC).

This change is designed to place equal emphasis on the sources and destination of budgets, he said.

The government will have to clearly state whether the money it plans to spend comes from budgets left over from the past fiscal year, or other sources, such as loans.

In the event it is a loan, the government will be required to specify whether the loan will be sought for use in an investment project or to offset the state budget deficit, said Mr Kamnoon.

Currently known as the expenditure budget bill, it will be renamed as the state budget bill, he said.

"In the past, problems have arisen in both the Democrat Party's Thai Khem Khaeng [Strong Thailand] economic stimulus project in 2009, and the 2-trillion-baht water management scheme of the Pheu Thai government," he said.

"These two governments proposed the loans they would seek to fund their projects should not be included in the budget bill that is subject to parliamentary scrutiny."

The CDC also agreed to add a broader definition of "state money" into the charter.

Under its new definition, Mr Kamnoon said, state money will no longer refer only to cash but to other kinds of assets that can be turned into cash, such a loans.

To ensure financial discipline, the government will be required to demonstrate that any loans it plans to seek are transparent and cost-efficient, he said.

This requirement will be clearly stated in the new constitution's sister law on state budgets and finance, he said.

"It is crucial to back up this principle by law to prevent tactics used to conceal hidden project costs," one CDC member said during yesterday's session.

"The first-car buyer and rice-pledging schemes, for instance, required billions of baht each in funding, yet ended up costing hundreds of billions of baht in debts," the CDC source added.

In a bid to prevent interference by MPs and senators in management of the state budget, the new constitution will prohibit them from diverting budgets earmarked for certain projects, said Mr Kamnoon.

They will still be allowed to make cuts to budgets. However, once they have been cut, the budgets will not be allowed to be diverted elsewhere, he said.

"In the past, governments have been allowed to spend state budgets without proper scrutiny," he said.

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