Measures to revive the flagging economy and ward off job losses have been sent to the Finance Ministry for inclusion in a state stimulus package.

These include tax incentives for homebuyers and the renovation of tourism sites.

Ministry spokesman Somchai Sujjapongse said additional ideas from the Industry and Labour ministries were in the pipeline.

There will be consultation with many ministries and agencies before the economic remedies are announced on Wednesday.

Helping the grassroots is the main target but the package will aid the property sector, too, Somchai said.

He ruled out a cut to the specific business tax. The indirect tax introduced in 1992 applies to businesses excluded from value added tax - including banks and financial institutions, life insurance companies, pawn brokers and real estate and is levied at rates between 0.1 per cent and 3 per cent.

Somchai declined to reveal other measures.

However, one source said the Tourism Ministry would renovate tourist sites and train new guides.

The Agriculture Ministry wants to launch reforestation programmes to create jobs for villagers.

The Labour Ministry has proposed 100,000 jobs for drought-hit farmers.

The government will ask state-owned banks to lend Bt25 billion to support small and medium-sized enterprises and farmers.

To boost the property sector the Finance Ministry will reduce house-transaction fees from 2 per cent to 0.01 per cent, mortgage registration fees from 1 per cent to 0.01 per cent and increase the tax exemption on mortgage interest from Bt50,000 to Bt100,000.

Minister Chalongphob Sussang-karn will discuss the package with state-owned banks on Wednesday.

The ministry worries lower growth will start to affect employment. Data reveals a slower-than-expected labour market.

It earlier said it would stimulate economic growth by recommending Bt7 billion in spending to shore up the economy and investor confidence.

There are fears that without the stimulus package economic growth will fall below 4 per cent.

The Bank of Thailand and the University of the Thai Chamber of Commerce agree 2007 economic growth could be as low as 3.75 per cent, due to slowing investment and domestic demand.

The Office of Industrial Economics last week planned to revise down industrial gross domestic product to below 6 per cent, against 6.5 per cent last year. This indicates a decline in the manufacturing of textiles, cement and automobiles particularly.

Manufacturing generates more than half of national GDP.

Meanwhile, exports could be hard hit by a decline in the United States dollar against the baht.

Some research houses are pessimistic about export growth reaching 10 per cent this year. The Commerce Ministry has a growth target of 12.5 per cent.

Wichit Chaitrong

The Nation