7 political parties unveil election visions to save SMEs
Ahead of the general election, Nation Group invited economic gurus of seven political parties to showcase how they will keep small and medium enterprises (SMEs) afloat if they are elected to government.
Representatives of the Pheu Thai, Palang Pracharath, Democrat, Thai Sang Thai, Chart Thai Pattana, Chart Pattanakla, and Move Forward parties joined the seminar titled “Thailand’s Future: Which Direction SMES Will Move”, held by Nation Group at the Renaissance Bangkok Ratchaprasong Hotel on Wednesday.
The three main campaign pledges presented at the seminar were to increase the SME support fund, reduce their corporate taxes, and amend laws to boost their competitiveness.
The visions were presented by Pisit Leeahtam, chairman of Democrat’s platforms committee; Paophum Rojanasakul, director of Pheu Thai’s policy centre; Sontirat Sontijirawong, chief of PPRP’s political policies team; Worawut Ounjai, deputy Chart Pattanakla leader; Suphan Mongkolsuthee, chairman of Thai Sang Thai’s economic strategies committee; Santi Kiranant, member of Chat Thai Pattana’s strategies committee; and Wiroj Lakkhanaadisorn, former Move Forward MP.
Pisit said a major challenge for Thai SMEs is the lack of funding. He said the Covid-19 pandemic wiped 3 trillion baht from the economic system, leaving SMEs struggling to find funding sources that don’t add to their problems.
The disappearance of funding means SMEs are unable to expand their businesses. Debt has put many out of business while others have been bought up by foreign firms, he added.
Pisit said the Democrats would establish the Vayupak Fund for SMEs with a budget of 500 billion baht. The fund would convert SME debt into shares so they could obtain loans to keep their businesses running.
Pisit said the Vayupak fund would act as a partner, holding no more than 49% of each SME’s shares, which could be bought back in 10 years.
“This method is a win-win solution because it would make use of state assets and give SMEs will a new source of funds that will not become NPLs [non-performing loans],’ Pisit said.
Currently, SMEs do not want to make new investments so converting their debt into shares would help the Thai economy expand, he said, adding that other parties’ proposals would weaken the banking system.
Paophum said the next government must address three major issues for SMEs: funds, costs, and competitiveness.
Currently, banks see SMEs as risky businesses and are reluctant to grant them loans. Paophum said a loan-guarantee system for SMEs was needed, and Pheu Thai would upgrade the Thai Credit Guarantee Corporation (TCG) to play that role.
On costs, he said the next government must help cut electricity bills for SMEs. He said this could be done by reducing natural gas to generate power, reforming the billing fee structure, changing the power reserve and stepping up negotiations with neighbouring countries for oil and gas exploration in overlapping territories.
On competitiveness, Pheu Thai would eradicate monopolies enjoyed by large corporations in certain sectors. This would help boost competitiveness of SMEs, Paophum said.
He added that 80% of SMEs are in the trade and services sector, not in the manufacturing supply chain. The next government should draw in more foreign direct investment to integrate SMEs into manufacturing supply chains and boost their exports from the current rate of 14-15%, he said.
Sontirat said the next government must hand the SMEs Promotion Office (SMEsPO) full control of drafting masterplans, allocating budget, drafting policies, and other major issues so its work does not overlap with other agencies.
Under a Palang Pracharath government, the office would ensure all other agencies work in the same direction to help SMEs, Sontirat added.
The next government must also encourage a change of mindset so SMEs adopt digital technologies.
“The SMEsPO must help coach SMEs to be more proficient in digital technologies,” he said. To tackle the issue of debt, his party would inject more funds for SMEs based on their credit scores.
Worawut said 98% of Thai SMEs are small enterprises, and labour costs made it hard for them to upgrade into medium-sized enterprises.
His party would open more funding sources for SMEs by using the credit-score system to get around the Credit Bureau’s blacklist so they could access soft loans.
In government, Chart Pattanakla would also promote online sales so SMEs could tap both domestic and foreign markets.
It would also invest in e-business to drive SME sales to become a key engine of the party’s policy to generate 5 trillion baht in revenue for the country, Worawut added.
Suphan said Thai Sang Thai would increase SMEs’ contribution to GDP from 30% to 50% within four years while helping to solve their debt issues.
SMEs would be allowed to obtain small loans without guarantees so that they could continue their business.
In government, Thai Sang Thai would push for changes to exempt SMEs from 1,400 laws seen as restricting their business.
The party would also stop the Food and Drug Administration from obstructing the launch of new businesses and adding more costs.
Additionally, it would waive corporate tax for SMEs for three years, establish industrial estates for SMEs only, and set up an innovation fund to support SMEs and develop new business platforms for them.
Santi said Thai SMEs are facing various issues while some 2.6 million micro enterprises are suffering a lot of problems. In Government, Chart Thai Pattana would coordinate efforts by all agencies to help SMEs while forming a venture capital fund to raise money in the stock market to provide investment for SMEs.
Control of state banks and financial institutions would be shifted from the Finance Ministry to the Bank of Thailand and become tools of financial support to keep SMEs in business.
Wiroj noted that the number of Thai SMEs was still lower than pre-Covid levels despite rising in the third quarter of last year.
He pinpointed SMEs’ main problems as lack of investment and high debt. Move Forward would provide a tax-deductible subsidy of 5,000 baht for each Thai to buy goods from SMEs.
In government, Move Forward would grant a 100,000 baht investment fund for each SME while boosting the TCG operating fund to 20 billion a year to guarantee more loans for SMEs.
It would also reduce corporate tax for SMEs to 0-15%.
Move Forward would oppose mergers of large corporations, so that SMEs would have competitiveness, and push to reduce their utility bills by reforming the power fee structure.
