Democrats ready to spend more

The Democrats, if they form a coalition government as expected, are ready to inject more public spending into the system in order to shore up the sagging economy.

They also have high ambitions to transform ex-prime minister Thaksin Shinawatra's populist schemes into well-managed social welfare.

The continuing political turmoil has worsened local economic conditions, which were already adversely affected by the sharp slowdown in the world economy. Moreover, acting Finance Minister Suchart Thadathamrongvech has no time to implement a new tax package or increase mid-year spending by Bt100 billion.

Korn Chatikavanij, head of the Democrat Party's economic team, said he agreed with the need for a supplementary budget.

Sirichok Sopha, a member of the party's economics team, said mid-year spending could however swell to Bt200 billion if it were deemed necessary to spend more to bolster the economy and stop unemployment from spiralling out of control.

Sirichok said if the party could form the next government, it would mobilise businessmen and other experts to lay out economic stimulus measures.

The government may face a higher budget deficit than previously planned by the outgoing administration, should revenue fall sharply, he added.

When in government, the party will also consider cutting corporate income tax from 30 per cent to 25 per cent.

Sirichok said the new government would also maintain public spending at the grass-roots level, as initiated by Thaksin. "But we may turn it into social welfare, such as setting up a Tambon Welfare Fund," he said.

The Democrats will also spend more on subsidising schools in rural areas, in the same way that it supported schools in the capital through the Bangkok Metropolitan Administration, he said. Students will get free education and schools will be well equipped with educational materials, he promised.

Sirichok said the party would also ensure efficient spending for rural projects.

The Democrats' idea of turning populist projects into social-welfare schemes is similar to what was proposed earlier by economists at the Thailand Development Research Institute (TDRI), an independent think-tank. However, if the party moves in this direction, it will need to increase taxes if it wants to provide more social welfare for people in need.

Meanwhile, the Democrats will bid for controlling key ministries such as Finance, Commerce and Education, in order to push their agenda, according to Sirichok.

Responding to a suggestion that the Democrats may lose popularity at the next general election if their performance does not meet voters' expectation, he said: "We have to take responsibility when the country is in a crisis."

Economists and businessmen have expressed their support for a coalition government led by the Democrats.

Democrat leader and likely premier Abhisit Vejjajiva is well qualified, said Viroj Na Ranong, an economist at the TDRI.