Future of Govt's bt400-billion borrowing bill still uncertain

This is despite Finance Minister Korn Chatikavanij insisting yesterday that the controversial bill was intact.

A senior government official on the Prime Minister Abhisit Vejjajiva's economic team said the administration, fearing a public backlash, might consider withdrawing the bill and instead using tax revenue to finance the rest of its stimulus programme.

"We cannot backtrack. I don't have the slightest intention to do so," Korn told The Nation.

"[Despite the tax-revenue collection being more than projected by the Budget Bureau], the projects to be invested in need more money than is available. While our revenue is higher, the fixed expenses have also risen. We still need to borrow, but we may need to borrow less than we planned," the minister said.

The Finance Ministry's revenue projection for fiscal 2010 ending September 30 has been raised to Bt1.52 trillion, from Bt1.35 trillion estimated earlier.

However, fiscal deficits are expected to continue in fiscal 2011, when expenditures of Bt2.07 trillion will be way above the projected revenue of Bt1.65 trillion.

Meanwhile, senior members of the ruling Democrat Party said the Bt400-billion borrowing bill should be withdrawn, because there was a chance it might not receive enough votes from some coalition MPs and senators.

"Pushing this bill through could be a political risk at this juncture. If we fail, then the government would have to resign to take responsibility, because it's a financial bill," the source said.

"Instead of borrowing Bt400 billion, we should use Bt250 billion to Bt300 billion of tax revenue to cover the stimulus programme. However, several projects will have to be reviewed, because there is less money available," the official said.

Abhisit recently discussed the matter with his economic team, which includes Deputy PM Trairong Suwankhiri, Korn and Korbsak Sabhavasu, secretary-general to the prime minister.

The official said some projects from the Transport, Agriculture and Natural Resources and Environment ministries that were overseen by coalition parties could be affected.

As for criticism the government is seeking parliamentary approval for a "blank cheque", Korn said some spending plans had more details than those submitted under the annual budget.

"We know this is an off-balance budget, and we must uphold transparency," he explained.

Still, he said details of the spending could change, because objectives and circumstances had changed. Since extra funding is not as necessary now as when the Kingdom was in a deep economic crisis, spending will be based on national strategies. For instance, projects enhancing national logistics and agricultural competitiveness will be given greater priority.