Democrats vow to cut household debt within 90 days if they win election
The Democrat Party on Thursday unveiled six measures to reduce household debt, saying they can be implemented within three months if it wins the May 14 general election.
The six measures were announced at the party’s head office by three members of its economic team: team leader Pisit Leeahtam, Kiart Sitthi-amorn and MR Sasiprin Chanthornthat.
Household debt is an urgent issue that needs to be addressed because people in all walks of life face massive debt, especially government officials and teachers, Pisit said, adding that about 50,000 teachers face lawsuits over debt defaults.
Pisit said if the Democrats win power, they will implement six debt-reduction measures within 90 days.
1. One trillion baht will be injected into the economy to stimulate activity and create jobs and income. The Democrats will cut the policy interest rate, reduce shortages of goods, and restructure the price of energy.
2. A new agency will be formed to prevent people from being easily lured into debt. The agency will issue warnings on disadvantageous loan conditions and promote financial literacy.
3. Regulations on interest-rate calculations will be enacted so that consumers will not be taken advantage of. Regulations on deductions from salaries to repay debt will be made fairer.
4. Citizens will be allowed to use retirement or pension funds before retirement to pay home loans or reduce debts.
5. Two bills will be fast tracked in the House of Representatives. One will amend the Bankruptcy Act so that people can restructure debt. Another will amend the Cheque Act so that issuers of cheques that bounce will face only civil lawsuits, not criminal prosecution.
6. The Mortgage Act and Articles 572-4 of the Civil Code will be amended to reduce the disadvantages debtors face. The Business Collateral Act will be amended to enhance protection of debtors.
The six measures will reduce the ratio of household debt to GDP from 87% to 80% – about 1 trillion baht – without creating more public debt, Pisit said.
A Democrat government would push for reduction of the interest ceiling on credit cards from over 12% per annum to 12% and this would benefit about 6 million card holders, saving about 30 billion baht a year in interest payments, he added.
Allowing people to use their pension funds before retirement will benefit about 5 million families and reduce debt by 900 billion baht, Pisit said.
About 300,000 farmers who are over 65 years old will see debts of 70 billion baht cleared, Pisit added.
A Democrat government would reduce the cost of electricity by 1 to 1.50 baht per unit and will abolish the fuel tariff system, which is blamed for the high cost of electricity, Kiart said, adding that it will also lower the price of petrol by two to three baht per litre by lowering the gross refining margin to make it fairer.
The price of cooking gas should be reduced by 80-100 baht per 15-kilogramme cylinder by reviewing the cost of imported and locally produced gas, he said.
Thailand can negotiate with Malaysia and Indonesia to increase trade, Sasiprin said.
A Democrat government will work with tour agencies to increase incentives to draw long-stay and wealthy tourists to Thailand and generate more revenue, he added.
