TDRI pokes holes in economic stimulus policies of major parties

In its article published on its website on Sunday, the TDRI urged the Election Commission (EC) to demand clear explanations from the parties on how they would finance their campaign promises.

The article said that most parties did not add up the amounts needed to finance their promises in their explanations submitted to the EC Office and most of them had no back-up plan if their promised stimulus policies failed to achieve the stated economic targets.

According to the TDRI, the top four parties with the biggest stimulus spending promises are:

Bhumjaithai — 1.9 trillion baht

Pheu Thai — 1.8 trillion baht

Move Forward — 1.3 trillion baht

Palang Pracharath — 1 trillion baht

In the article, the TDRI made five observations about the economic policies proposed by most of the political parties:

● Some political parties failed to explain the source of funding for their economic policies to the EC, although their policies would impose a huge budgetary burden on the country. This exposed their failure to provide complete information to voters.

● Several parties claimed their economic campaign promises would be financed within the current budget allocations, but they failed to highlight the areas that would see budget cuts. This lack of disclosure denies voters the chance to gauge the possible impact of their proposed policies and what they could lose in the current budget. Some parties claimed vaguely that they would raise taxes, without specifying which ones.

● Although some political parties have indicated the sources of funding, they fail to substantiate that the amount would be adequate to implement their policies. Some parties even repeated the sources of funding to mislead voters into believing that money was available.

● Some political parties said their policies would be financed through non-budget sources, such as with money from various funds or through tax exemptions. This was again tantamount to misleading the voters into believing that their policies would not create liabilities, as the use of money from state enterprises or special government banks would also create financial liabilities for the state.

● Most parties only highlighted the benefits of their policies, but did not point out the negative impacts or risks of such polices.

The article also stated that none of the political parties provided an analysis to show how their policies would be better than the current ones.

The TDRI pointed out the flaws in the economic campaign promises of six major political parties:

Bhumjaithai Party

The party has said its 1.9-trillion-baht spending plans would need over 700 billion baht a year from non-budget sources through urgent soft loans, but it failed to take into account the collateral needed for such loans.

Bhumjaithai also failed to provide details to the EC of its key promises, such as the three-year debt moratorium for farmers, free cancer treatment, reduce bus fare, free solar rooftop installations, and assistance for riders to buy cheap electric motorcycles.

Pheu Thai Party

The party has claimed its government would increase tax revenue to finance its digital wallet policy, under which 10,000 baht would be provided to every Thai above 16 years of age. It also says it would cut or trim welfare budgets to finance the digital wallet scheme. But the party failed to point out which welfare projects would see budget cuts.

Even worse, Pheu Thai was overly optimistic that its digital wallet policy would be successful. It also lacked information on risk assessment if the project failed to stimulate the economy.

Moreover, 44 out of its 70 economic campaign promises would need more money than the annual budget and this contradicted its claim to the EC that its projects could be financed with the current budget.

Move Forward Party

The party has provided the clearest explanation on how it would finance its projects with the current budget without depending on non-budget money.

But its plan to reform central government agencies and the armed forces by cutting their budget for financing its campaign promises would definitely meet with strong opposition.

Palang Pracharath Party

The party has claimed its policy to reduce oil prices would not use the national budget, but would be achieved by exemptions in excise and local taxes as well as exemptions from mandatory contributions to the Oil Fuel Fund and the environment conservation fund for a year.

The TDRI believes this misleads the public because such a reduction in taxes and exemptions in contributions would create liabilities in the form of budget deficit and rising public debt. Currently, the Oil Fuel Fund has an accumulated deficit of 85 billion baht from oil price interventions.

Palang Pracharath’s policy to exempt income tax for people with income less than 500,000 baht a year would also affect the financial status of the Finance Ministry.

Democrat Party

The Democrat campaign promises would be financed by up to 460 billion baht from non-budget rebvenue, but it fails to point out the source of the funds. It also fails to provide risk assessments of the policies.

United Thai Nation Party

The party has projected the estimated cost of its policies at far lower than the amount needed for financing them. For example, it would need 175 billion baht to increase welfare subsidy to 1,000 baht per head. The party reported to the EC Office that it would need only 71 billion baht.

The party would need 77 billion baht to increase the monthly allowance for the elderly and 78 billion baht for raising contributions to the Social Security Fund, while it reported to the EC that it would need only 29 billion baht for the two campaign promises.