The National Economic and Social Development Board aims to curb the level of public debt at 45 to 48 per cent of gross domestic product in the next six years - well below the Finance Ministry's benchmark of 50 per cent - to ensure economic stability.

"We have talked about economic stability in the next five years, amid a huge flow of capital around the globe estimated to be US$2 trillion (Bt78 trillion) in two years. To achieve stability, we should keep our public debt between 45 to 48 per cent of GDP during the 10th national plan," Ampon Kittiampon, secretary general of the NESDB, a state think-thank, said yesterday.

Public debt is now about 41.4 per cent of GDP, or Bt3.2 trillion.

NESDB yesterday presented the draft of its 10th national plan covering 2007 to 2011 to the National Economic and Social Advisory Council. The conference was chaired by caretaker Prime Minister Thaksin Shinawatra and attended by economic ministers. The plan will be forwarded for Cabinet approval on July 30.

Ampon said the new national plan would focus on stability rather than economic growth. It would focus on how to control public debt and the current account deficit at no more than 2 per cent of GDP. Inflation should be contained at 2 per cent, with unemployment also targeted at 2 per cent of the population. The income gap between the rich and the poor should be 10 times, down from the current 12.1 times.

Ampon said official reserves should be maintained at about three times the level of short-term debts. Currently, official reserves amount to US$58.1 billion, or about three times the country's short-term debt obligation. The NESDB would also set targets for improvements to productivity and clean-environment levels, he said.

Implementation plans would be discussed later with ministries, which would have to decide what to do to achieve sustainable development, he said.

Ampon said Thaksin agreed with the strategies in the plan which focused on economic restructuring, the sufficiency-economy model, cleaning up the environment and promoting good governance. "Thaksin did not want to change the plan," he said.

Earlier, Thaksin indicated that he wanted the NESDB to provide more details, plus how much money would be needed to achieve happiness and green objectives, as planned by the NESDB.

Thaksin said at the conference he wanted to see the NESDB clearly indicate if and how the government should continue to support some industrial sectors such as the automotive, food and some labour-intense industries.

If the Cabinet approves the 10th plan, it will be sent back to the council, which should take three weeks to consider it. The 10th plan is due to be implemented from October 1 this year.

Meanwhile, the Finance Ministry yesterday announced the government's tax income over the first nine months of the current fiscal year was Bt1.004 trillion.

This was Bt7.74 billion or 0.8 per cent higher than its target. It is also Bt69.66 billion higher than in the same period last fiscal year. The 2006 fiscal year started on October 1, 2005.

Somchai Sujjapongse, deputy director general of the ministry's Fiscal Policy Office, said net tax incomes in June were recorded at Bt86.44 billion, 2 per cent higher than the ministry's target.

"The departments that have collected taxes greater than their targets include the Revenue Department, with Bt2.66 billion above target. The key tax that boosted government income was value-added tax, which was 4.9 per cent higher than targeted," Somchai said.

Tax collected by other state agencies was also higher than targeted by Bt6.24 billion. Most notable was extra returns of Bt7.8 billion from petroleum concessionaires, over an earlier anticipated Bt6.3 billion. This was due mainly to higher prices for petroleum.

However, some state agencies collected less tax than targeted. The Excise Department was Bt1.93 billion or 7 per cent under its target. And the Customs Department was Bt2.33 billion or 22 per cent under its targeted tax income.

State enterprises also recorded incomes that were Bt3.4 billion or 26 per cent lower than targeted. TOT Plc submitted Bt1.78 billion less than its targeted income.

Somchai said that with gross nine-month incomes above expectations, the government believed taxes collected this fiscal year would meet the Bt1.36 trillion full-year target.

Wichit Chaitrong

The Nation