The proposed 8-per-cent hike in state officials' monthly salaries is likely to be implemented only in April 2015 and not in October this year as earlier expected, Finance Ministry permanent secretary Rungson Sriworasat said yesterday.
He added that he had already asked the Comptroller-General’s Office to make arrangements for the salary hike.
Earlier, he had said that if talks with the Office did conclude and the relevant law was amended to support the salary increase, the salary hike could be introduced in October.
He made the remark on the sidelines of the FPO Symposium 2014 hosted by the Fiscal Policy Office yesterday.
Fiscal Policy Office director-general Krisda Chinavicharana, said that the Office has already studied the impact of the salary hike. In the case of a salary hike by 1 one per cent – to 7 per cent – additional money would be injected into the economic system through government spending of a total Bt5.8 billion per year, or Bt1.5 billion per quarter. This would boost GDP growth by 0.3 percentage point but would increase inflation to 2.59 per cent from 2.5 per cent. In the case of a 2-per-cent salary hike – to 8 per cent – there would be additional Bt11.6 billion per year injected into the economy or Bt3 billion per quarter, which will boost GDP growth by 0.6 percentage point.
The National Council for Peace and Order plans to raise the salaries of state officials by 7-8 per cent from the current regular hike of 6 per cent per year.
Speaking at the same forum on the topic of fiscal policy, challenge, reform, and sustainability, Kasikornbank chairman and CEO Banthoon Lamsam said the private banking sector wants the government to promote clearer rules and laws to continue to facilitate doing business in Thailand and further create a business-friendly environment. He said the banking sector has been strong, given that banks have already adapted to the intensely competitive market and have learnt valuable lessons from the financial crisis in 1997. One lesson learnt from 1997 is the sector has to give importance to risk management and risk analysis.
Krisda said that the Office aims to turn Thailand into a higher-income country with high competitiveness and also wants to reduce disparities in income distribution.
Sathit Limpongpan, chairman of the Stock Exchange of Thailand, said that the capital market has played a role in reducing the burden on the fiscal budget by facilitating the establishment of infrastructure funds by private and state enterprises when they want to mobilise funds for their project developments. The Electricity Generating Authority of Thailand also has a plan to launch an infrastructure fund.
The SET has encouraged listed firms to adopt the concept of social enterprise, or businesses with high social responsibility.
Kitipong Urapeepatanapong, chairman of the Baker & McKenzie’s Bangkok office, said he wants to see faster amendment of crucial laws and the faster completion of new laws, including the reform of some tax laws, to foster Thailand’s competitiveness. The tax system should also be used to combat corruption in Thailand.
Currently representatives of the business sector have proposed to the NCPO to amend laws and regulations to reduce obstacles to doing business in Thailand.