Thailand’s Deputy Prime Minister Trairong Suwannakiri yesterday warned that locking in government subsidies for electricity, city buses and trains to assist low-income earners would prove too much of a burden for Thailand, writes The Nation.
“I disagree with this idea if we’re going to do it permanently. People in Sweden and other welfare states (in Scandinavia) have to pay very high income tax rates to finance these free services.
“In Thailand, there are only about six million taxpayers who will have to shoulder the expenses of the whole 60-million population. We could extend the measures for six more months, but not forever,” he said.
However, Ampon Kittiampon, secretary-general of National Economic and Social Development Board, said the cost-of-living relief measures are appropriate at this stage as they will help curb inflation.
Besides extending free electricity for households using 90 units or less a month and free rides on “hot” buses and third-class trains until year-end, the Cabinet also approved LPG and NGV subsidies.
Ampon said relieving inflationary pressure will let monetary authorities avoid raising interest rates sharply, which would depress consumption and economic growth, especially in the wake of the political crisis and riots of last April and May.
“We discussed this issue extensively before continuing the measures. We’d like to see inflation within the range of 2.5-3.5 per cent. If these measures were phased out, inflation would spike in July and August year-on-year due to the low base,” he said.
The cost breaks would also help if the government wants to narrow the income gap between rich and poor, he added.
