Extension to relief mulled

Finance Minister Korn Chatikavanij is thinking of extending the government's cost-of-living relief measures for another two or even five months.

The five measures, originally introduced for six months, include a price cap on cooking gas, free rides on public buses and economy-class trains and free tap water and electricity. The measures are due to expire at the end of the month.

Korn said an extension for two more months would be based on projections of an economic recovery in the fourth quarter. An extension for five months would be aimed at helping low-income groups affected by a lingering economic recession.

If he chooses a five-month extension, it will cost about Bt12 billion, he said. The original cost of the relief measures, which began in February, was estimated at close to Bt14 billion.

The price of liquefied petroleum gas (LPG) used in cooking has been capped at Bt18.30 a kilogram, or 11 baht a litre.

Korn is worried about the recently rally in the crude-oil price, which is now approaching US$70 (Bt2,400) a barrel.

"It's unfortunate the oil price jumped after the government increased the excise tax," he said, referring to the government's recent Bt2-a-litre hike in the tax on petrol and diesel.

The tax increase has not yet affected consumers, because of oil subsidies.

Earlier, the Fiscal Policy Office suggested Korn abolish the price cap on LPG, because of the fiscal burden and market distortion. The office also suggested the amount of free water and electricity be lowered from the present rate of 30 cubic metres of water and 90 units of electricity a month without charge.

The finance minister is concerned about a slow economic recovery, due partly to slow capital spending caused by complex government procurements, e-auctions in particular. Last week, he said he would review government procurement rules, or e-auctions, in order to speed up implementation of both the first and the second stimulus packages, worth Bt116 billion and Bt1.43 trillion, respectively.

Korn said he also faced a tough decision on whether to give employees of state-owned enterprises a Bt2,000 stipend. Trade unions of both the Provincial and Metropolitan Electricity Authorities have asked for a Bt2,000 monthly stipend - a fixed regular payment - for employees whose monthly income does not exceed Bt50,000.

"If I agree to their request, how can I explain it to the poor who are working in informal sectors, such as self-employed workers?" Korn said.

The public is also upset about the trade-union demand, because state-enterprise workers already have high incomes and other working incentives.

Korn said the ministry was studying the consequences if the government gave Bt2,000 cash to those whose monthly income was Bt12,000 or less.

Restructuring of the State Railway of Thailand, in preparation for new investment worth about Bt200 billion over the next few years, is also a challenge, Korn said. Trade unions have strongly opposed the government move.

The deployment of 4,000 new buses to service commuters in Bangkok is also a controversial issue, because there is public suspicion about the Bt64-billion cost of the natural-gas-for-vehicle bus-leasing project as proposed by the transport minister.

That project is now under review by the National Economic and Social Development Board.