Korn questions Bt2-tn loan bill
Democrat Party deputy leader Korn Chatikavanij yesterday expressed serious concerns about the Bt2-trillion infrastructure borrowing bill proposed by the Yingluck Shinawatra government as it might violate the Constitution, which stipulates that any government expenditure should be allocated only through the fiscal expenditure budget bill.Speaking on the "Business Talk" programme on Krungthep Turakij TV, he said if the borrowing would be more transparent, Parliament would be able to systematically evaluate the details of the infrastructure projects proposed by the government. The government also needed to declare to Parliament what they would do about the projects. Meanwhile, the Finance Ministry could study the sources of the finances to invest in the projects.
"As the opposition, we will seek the Constitution Court's interpretation of the Bt2-trillion bill - whether it violates the law," said Korn, a former finance minister.
Korn said he agreed and supported the Yingluck government's investment in the country's infrastructure and communications system, which would account for about 80 per cent of the Bt2-trillion budget. The government, however, had not revealed any details of the infrastructure investment projects or even conducted a feasibility study if the projects are worth developing.
"My only concern is the source of the investment and the way they got the money," he noted.
The Bt2-trillion infrastructure borrowing bill, which will allow the government to raise the entire amount by end-2020 and require it to clear the debt in 50 years, got the Cabinet's approval on Tuesday. Including accumulated interest, the total loan burden for the Bt2-trillion budget will be about Bt5.1 trillion.
Korn said that the B2-trillion bill gave no information about the infrastructure projects. The bill only gave legal authority to the government to provide a huge amount of loans. They provide no guarantee on returning by those borrowing the money, whether it will be worth it or not.
"I believe in the government's ability to facilitate nominal GDP growth at 7 per cent annually as the actual GDP growth will be about 4 per cent plus another 3 per cent inflation. However, the government's rice-pledging scheme will create a big loan burden of Bt410 billion by the end of this year, and the burden will be increased by between Bt200 billion and Bt300 billion every year as long as the government continued its rice-pledging scheme. This means that the public debt level will be increased by 2 per cent and 3 per cent of GDP every year," Korn said.
He add that if the government continued to push policies that damaged the country, Thailand's economy had a high possibility of a crisis as the level of public debt would surge to between 50 per cent and 60 per cent of the country's GDP.
Korn gave the example of the Bt350-billion borrowing bill made previously by the government to finance flood-related investment. The bill was proposed as the government claimed it wanted to urgently solve the flood problem.
However, he said, one year had already passed, but the government had spent only Bt6 billion of the budget. They had not clarified about how to manage the remaining Bt340 billion borrowing fund.