HELPING THE WORKING POOR
Minimum wage may be raised Bt10 a day
Govt also considers lower SSF contributions
The caretaker government yesterday considered raising the minimum wage by Bt10 per day and reducing the compulsory contribution to the Social Security Fund (SSF) as two immediate measures to relieve the burden of low-income earners from soaring oil prices.
Other issues considered at the special Cabinet meeting included a plan to have the Bank for Agriculture and Agricultural Cooperatives (BAAC) cut its lending rate by 1 per cent for farmers whose debts are under Bt100,000.
Meanwhile, like other proposals, the Cabinet reached no conclusion whether to transfer government funds to BAAC and the Government Housing Bank for relending to low-income earners.
"We consider that it is extremely appropriate to raise the minimum wage. Despite the increase in wages, this one is special given the volatility of oil prices," said caretaker Labour Minister Somsak Thepsuthin after the hours-long meeting at Government House.
The minimum wage is now Bt184 per day.
According to caretaker Deputy Prime Minister Suwat Liptapanlop, related government agencies have been assigned to study the impact of the minimum-wage increase upon operating costs in the industrial sector and upon inflation. The study will then be discussed in two weeks' time.
On the reduction of the compulsory contribution to the Social Security Fund, no minister elaborated in detail how much the contribution would be cut, but Suwat said the fund would also consider increasing benefits to members to cope with the rising cost of living.
Ampon Kiattiampon, secretary-general of the National Economic and Social Development Board, added that the Cabinet was also considering having the Bangkok Mass Transit Authority (BMTA), which operates public buses in Bangkok, issue monthly tickets that offer passengers a discount.
"This is necessary given that BMTA serves three million passengers daily," he said.
Meanwhile, PTT Plc was also mentioned as the state agency which could reduce the BMTA's fuel costs, Bt30 million daily, by making the diesel-engine buses natural-gas compatible.
"That should save Bt10 million a day in fuel costs," Ampon noted.
On Thursday caretaker Deputy Finance Minister Varathep Varakorn said state deposits, parked at various institutions, could be diverted to state-owned BAAC and the Government Housing Bank so they could relend the money to low-income earners at a lower rate. Varathep said Bt160 billion could go into the scheme.
While Varathep said that this would be done on a voluntary basis, Wisit Tantisunthorn, secretary-general of the Government Pension Fund, said the fund was ready to cooperate if returns were guaranteed.
"We can write off risks as both are state-owned banks," Wisit said. "We're ready to channel Bt15 billion into the scheme, as long as the return of the money is guaranteed at 5.3-5.5 per cent per annum, which is equivalent to deposit rates in one or two years."
Sources in the government sector said the scheme could flop as most state agencies had deposited money in a number of banks and moving the money to the BAAC and GHB could mean a lower return which could not cover their financial costs.
On the proposed cut of lending rates to poor farmers by 1 percentage point, BAAC president Thirapong Tangtheerasunant said the proposal would cost the bank Bt500 million-Bt600 million per annum, based on the fact that there were 2.2 million farmer households with debts lower than Bt100,000.
"To finance the cost, we need new deposits of Bt20 billion or Bt30 billion," he said, adding that the bank would offer a 0.75-per-cent deposit rate for the money.
To Ampon, one option is to have the GHB and BAAC borrow money from the Government Savings Bank, which is flooded with low-cost deposits.
"The money bears a low cost of funds, and it could be loaned at low rates," he said.
The loan issue will be considered again at a meeting on June 8.