Thailand’s Deputy Finance Minister stated yesterday that the government will not be able to distribute 10,000 baht in digital money to people on February 1 as previously anticipated because developing a secure system will take longer.
Mr. Julapun Amornvivat said that the digital money handout needs maximum security but I can confirm that we will finish it for the handout to start within the first quarter of next year,” he told reporters on Thursday.
Prime Minister Srettha Thavisin had already chosen February 1 as the start date for the initiative, which is the cornerstone of the Pheu Thai Party’s economic revitalization strategy.
“The prime minister directed that we be ready to distribute the funds by February 1, but I am prepared to tell him that we will not be able to do so because we need time to develop a stable and secure system.” “We cannot exchange the system for time,” said Mr Julapun, a Pheu Thai MP from Chiang Rai.
He also admitted that a subcommittee working on the program’s funding sources was unable to reach a decision on Thursday. It will reconvene on Tuesday.
The Srettha administration intends to distribute 10,000 baht in digital money to every Thai aged 16 and up, at a cost of 548 billion baht. According to the administration, distribution could take place via a new “super app.”
According to Mr Srettha, the multiplier impact of greater consumption spending could boost the GDP by up to 5% next year. He maintains that increased tax revenue from economic activity would help to partially fund the system.
However, an increasing number of analysts, including two former Bank of Thailand governors, have expressed concern that the strategy poses too great a danger to the economy at a time when public debt is approaching acceptable levels.
The government has proposed that funding for the system come from borrowing by various state institutions, so that the total does not count as public debt.
Many critics have claimed that the money should only be provided to people who truly need it, and the government has admitted that the system may be changed to exclude the wealthy.
In a related event, former senator Rosana Rositrakul on Thursday petitioned the State Audit Office (SAO) to investigate and stop the digital wallet system, claiming that it is potentially harmful.
She stated that under the State Audit Act of 2018, if the scheme is found to violate the constitution and related laws or to cause harm to the monetary and fiscal systems, the president of the State Audit Commission can invite the heads of the Election Commission and the National Anti-Corruption Commission to jointly investigate it.
If at least two of the three agency heads believe the idea is too hazardous, she said, they can urge the House of Representatives and the Senate to put a stop to it.
Ms Rosana stated that her petition addressed main points:
1. The scheme is deplorable.
2. It violates the Currency Act.
3. It may impose unnecessary financial constraints on the country
4. It violates the principle of state budget spending.
5. It involves the hiding of national debt.
6. It violates Section 9 of the 2018 State Fiscal Discipline Act.
“The 10,000-baht digital wallet scheme can be compared to the rice-pledging scheme of the Yingluck Shinawatra government which resulted in several cabinet ministers being jailed,” Ms. Rosana remarked.
“But it was pointless because we had lost our money.” As a taxpayer, I am carrying out my civic duty by requesting that interested groups investigate this situation.”
House committee hearing testimony on Digital Money handout.
Meanwhile, the House Economic Development Committee heard from a Bank of Thailand official and others on Thursday regarding the benefits of the gift.
Daranee Saeju, the central bank’s associate governor for payment systems policy and financial consumer protection, stated that the primary purpose of the handout is to stimulate spending.
However, the central bank believes that doing so is unnecessary because private sector demand is increasing and the labour situation is improving. She suggested that the policy might not be worthwhile.
The committee’s chairman, Move Forward Party MP Sithipol Wibulthanakul, said a delegate from the Finance Ministry was unable to provide details on where the money for the scheme will come from.
Mr Sithipol stated that he wants the government to study the scheme’s advantages and downsides, funding sources, and potential short- and long-term economic repercussions.
The 10,000-baht cash handout initiative has received widespread condemnation. More than 100 economists, led by two former governors of the Bank of Thailand, oppose the proposal, which they believe will cause more harm than gain.
The following are the main arguments: (1) the Thai economy is recovering, particularly in the consumption sector, and there is no need for a big push; (2) the 560 billion baht required can be spent on more worthwhile projects; (3) the scheme is not worth it because the fiscal multiplier is less than one; and (4) fiscal discipline should be strictly enforced.
The administration has justified its cash handout scheme, claiming that the economy is in a tough stage, necessitating huge economic stimulus. One reason is that people can utilise the handouts to establish a business. Prime Minister Srettha Thavisin has even requested popular support for the proposal.
Using handouts to start a business is a weak excuse. There could be a small percentage of cash receivers that do this. The sum is insufficient, and they lack the requisite entrepreneurship abilities. Almost all of the money will go towards consuming.