House approves 122 billion baht digital wallet scheme budget

The House of Representatives approved a supplementary bill to increase the budget for the current fiscal year by 122 billion baht, in a vote held late yesterday. This additional funding aims to partially finance the government’s digital wallet handout scheme.

A total of 297 MPs voted in favour of the bill, while 164 opposed it, with no abstentions recorded.

Among the absentees were 17 members of the government coalition, including Pheu Thai‘s Sutin Klungsang, Kriang Kantinan, and Chalerm Ubumrung; Palang Pracharath Party’s Prawit Wongsuwon and Thamanat Prompow; and Suchart Chomklin from the United Thai Nation Party. Additionally, five MPs from the opposition Move Forward Party (MFP), including its chief adviser Pita Limjaroenrat, and 10 MPs from the Democrat Party did not participate in the vote.

Opposition parties expressed their intent to vote against the bill in the next hearing, citing concerns that it violates the State Fiscal and Financial Discipline Act.

Prime Minister Srettha Thavisin addressed the House before the vote, emphasising the necessity of the 122-billion-baht budget increase to stimulate the economy. He highlighted that the additional funds are essential to boost local economic activities, sustain consumption levels, and create new business opportunities.

“The current economic situation and budget constraints for the 2024 fiscal year necessitated this budget increase to expedite the launch of the digital wallet handout programme.”

The 62 year old PM detailed that 10 billion baht would come from tax collection, with the remaining amount covered by loans. This increase is expected to raise investment spending in the current fiscal budget from 17.1% to 22.4%. The Thai premier assured that the spending plan aligns with the State Fiscal and Financial Discipline Act, reported Bangkok Post.

Bhumjaithai leader Anutin Charnvirakul confirmed that Bhumjaithai MPs were among the 297 lawmakers who supported the bill.

“The bill received majority support in the House. The parties in the coalition government share a collective responsibility, so they have to support each other. In principle, coalition parties have to back any government policy that benefits the people.”

ORIGINAL STORY: Thailand’s digital wallet disaster: MFP oppose budget

Opposition parties have taken a firm stand against the supplementary budget bill, targeting the controversial digital wallet scheme. Estimated at a staggering 450 billion baht, the scheme is criticised for its alleged inefficacy in boosting the GDP and potential legal issues, which could set a detrimental precedent for future national budgeting and fiscal policies.

Sirikanya Tansakul, Deputy Leader of the Move Forward Party (MFP), urged coalition parties to reject the flagship policy of the Pheu Thai Party. She warned that supporting the digital wallet scheme might implicate them in legal violations and expose Thailand to significant financial risks.

The Lower House engaged in a heated debate over the government’s mid-year budget bill, which seeks an additional 122 billion baht to address funding shortfalls after the decision to avoid borrowing from the Bank of Agriculture and Agricultural Cooperatives (BAAC).

With registrations for the scheme set to begin in just 15 days, Sirikanya pointed out the ambiguity surrounding the ministry or agency responsible for the scheme’s implementation. The disbursement of the promised 10,000 baht benefit to Thai citizens also remains unclear, despite two companies winning the bid to design the system.

Sirikanya expressed concerns that major retail outlets, with their robust financial backing, would disproportionately benefit from the scheme, leaving small retailers struggling due to weak liquidity. The scheme’s funding, scaled down to 450 billion baht, assumes only 90% of eligible participants will register. Sirikanya labelled the scheme a face-saving effort by the government to uphold its election promises.

With GDP growth projections downgraded from 2.7% to 2.5%, Sirikanya criticised the government for failing to adjust its revenue projections. She highlighted the 26 billion baht shortfall in revenues over the past eight months, casting doubt on the government’s ability to meet its revenue forecast.

Regarding the underutilised 100 billion baht Central Fund, Sirikanya argued that it should have been deployed to alleviate financial burdens from electricity and oil prices or to aid those affected by flooding and drought.

She accused the government of hesitating to use the fund in anticipation of needing it for the digital wallet scheme. She also criticised the government’s plan to transfer 2024 fiscal year funds to the next year, claiming it breaches fiscal discipline principles, reported Thai PBS World.