Opposition slams budget for fiscal 2009

Prime Minister Samak Sundaravej yesterday presented Parliament with the proposed government expenditures for fiscal 2009, starting October 1. The government set expenditures at Bt1.835 trillion, up 10.5 per cent rise from fiscal 2008. Samak said the government would run a fiscal deficit of Bt249.5 billion, equal to 2.4 per cent of gross domestic product (GDP), because the government wanted to boost the economy. The government projected next year's GDP would expand 5.5 per cent, with moderate inflation of 3.5 per cent.

Abhisit Vejjajiva, leader of the opposition Democrat Party, raised questions about the government's ability to run the economy, saying the fiscal-2009 budget bill did not reflect the reality of current economic conditions.

When the government prepared the budget early this year, it wanted to encourage economic growth.

Abhisit, however, argued that economic conditions had changed, because the threat of inflationary pressure, caused largely by high oil prices, had emerged.

He said running a budget deficit might worsen inflationary pressure and suggested the government might need to narrow the deficits later in case inflation rises further.

He did not think the government would achieve an inflation rate of 3.5 per cent next fiscal year, as inflation was now higher than 6 per cent.

He pointed out the government did not provide adequate funds to help the elderly, Aids patients and other low-income groups. He suggested the government produce coupons for the poor - something now being prepared - as a springboard to create a formal social-welfare system for the poor in the future.

The opposition leader expressed fears that the slow growth of the economy would result in lower government revenue, which would force the Revenue Department to collect taxes from private firms and individual taxpayers unfairly.

Abhisit was also worried about the government setting its capital-spending plan at Bt407 billion, only a 1.7-per-cent rise compared with a 10.5-per-cent rise in total expenditures. This indicates the government has less money for investment, he said. He believes the trend is likely to continue, meaning government spending will meet only current-spending and debt-repayment requirements with nothing for capital spending. He warned that small investments in irrigation, double-railway tracks and other logistics projects would result in slow progress in the Kingdom's infrastructure projects.

He also said the budget allocated for education was inadequate.

"I don't think there is real free education for 14 school years as Prime Minister Samak claims," said Abhisit.

The government needs to allocate Bt18 billion more to achieve the goal of free basic education, he said.

Abhisit also criticised the government's transfers to local governments, which increased only 0.25 per cent from fiscal 2008.