Published on June 27, 2005

The government’s spending plans in its 2006 fiscal budget are risky, ambiguous and inefficient, Democrat Party spokesman Ong-art Klampaiboon said yesterday.

He said the expected growth rate on which the government based its 2006 budget was too high because it drafted the spending plan when the price of oil was at US$44 (Bt1,800) per barrel but the price had now reached $61 per barrel.

“Oil companies foresee that the oil price will rise even more and the country will face the risk of price fluctuations,’’ Ong-art said.

He said every $10 increase in the oil price would affect the country’s GDP by 1.6 per cent. Also, the exchange rate of Bt38 to the dollar is not appropriate, judging from the fact that the baht dropped further following the rise in US interest rates.

Ong-art said the government’s assumption that GDP growth would hit 5.5 per cent in 2006 was unrealistic because the economy had experienced only negative factors. The Bank of Thailand had reduced its GDP growth forecast for next year to 4 per cent. And though the National Economic and Social Development Board argues that planned state mega-development projects will boost the economy, he said the truth was that these mega-projects stretched over eight to 10 years and cannot fuel growth with the small initial expenditure in the early years.

“The government is projecting an unrealistic growth rate for next year and its fiscal credibility will be adversely affected,’’ Ong-art said.

He also questioned the government’s claim that it had been able to expand the tax base.

Ong-art pointed to ambiguity in proposed spending, such as the Bt40-billion allocation for CEO governor projects. “This money is only for political purposes. We wonder if the budget will be used to help CEO governors run in the next Senate election,’’ he said.

He also accused the government of transferring funds from the Bt30 health scheme to the Bt250-billion central fund. The proposed budget also showed that Bt1.3 billion would be used to pay debts from the Village Fund. “This shows that the Village Fund has failed. But why does the government have to pay this debt,’’ he said.

Ong-art also accused the government of setting aside billions of baht in a “ghost budget’’ for the country’s leader to abuse.

Sophon Thanukrit

The Nation

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