Free water, free
electricity, free buses,
free trains, cheaper cooking gas, and cheaper gasohol and diesel...
and more votes for PPP in the next election?
By Jon Fernquest
Prime Minister Samak Sundaravej announced the
"six months, six measures" economic
package on Tuesday.
The planned coupon programme for the poor has been canceled because of "questions about access and eligibility."
The new package will provide many things for free (handouts) or at a discount.
The aim is to make it easier for people to deal with recent inflation in food and oil prices, but reducing the price of goods usually leads to even greater demand which might push up the cost of the programme for the Thai government.
Something for the poor
Some of the six measures help the poor. Bangkok's non-airconditioned buses will be free beginning on August 1. The Bangkok Mass transit Authority is already debt-ridden, this measure may make it even more so.
Third class trains will will also be available to anywhere in the country for free. If they are free, will there be any third class seats left to book when you need to go somewhere?
There will obviously be limits to the number of tickets per person or family, or else there would be hoarding. "How much will all the tickets be?" "Free, of course." "I'll take all of them," is a dialogue one might hear.
New measures will encourage conservation of water and electricity. No more utility bills for water and electricity, if you are a home that uses small amounts. If a household uses less than 50 cubic meters of water, water is free. If a household uses less than 80 units of electricity, electricity is free. Electricity usage from 81-150 units will receive a 50% discount.
Free bus, train, water, and electricity will cost the government another 20 billion baht over six months.
The BMTA and the metropolitan and provincial electricity authorities will now be providing their services for free and may well expect increased demand and increased costs.
Something for the middle class and the rich too
Some benefits are for everyone, not just the poor. Reductions in fuel costs that start on July 25 will benefit almost everyone. Diesel will cost 2.71 baht less, gasohol will be 3.88 baht less, and gasohol 91 will be 3.33 baht less.
Excise taxes on fuel are being cut by 26 billion baht to pay for this. This will mean a larger government deficit that the government will have finance with higher taxes elsewhere or by borrowing.
At a time of rising fuel costs like this, measures to encourage the conservation of fuel would be expected. These lower than true market prices will likely lead to increased fuel usage, unless of course fuel is rationed, in which case expect long lines.
Freezing the price of cooking gas for six months is also not likely to encourage conservation.
Six months only?
The big question will be at the end of six months will it be possible to stop this 47 billion baht programme, especially if the current inflation problems are still with us?Once LPG subsidies began they proved impossible to stop.
Most of the people who continue to install LPG in their cars probably don't realise they are not paying the full cost and that these low prices cannot last forever.
Claims were made at the announcement of the programme that it will help Thailand achieve 6% economic growth this year and cut household expenses by up to 1,000 baht per month. Only a small fraction of households in Thailand will benefit from reduced water and electricity costs:
Authorities estimate that 3.2 million households nationwide will qualify for the breaks on water bills and 6.47 million households for the electricity waiver. Another 9.86 million households using 81 to 150 units of electricity per month will benefit from the 50% discount.
Six months of free handouts will buy PPP some popularity at a likely snap election in the near future.
(Source: Bangkok Post, op-ed section, daily editorial, 17-07-08, page 10, temp-link)
Vocabulary:
measures - actions taken to deal with a problem มาตราการan economic package - a set of measures the government takes to solve an economic problem มาตราการ หรือ แผนการแก้ปัญหาเศรษฐกิจ
a coupon - a piece of paper that gets you a discount or something for free คูปอง
access - the ability to get something สิทธิหรือโอกาสในการใช้
eligibility - whether you can participate in the programme or not การมีสิทธิได้รับคัดเลือก
handouts - things for free แจกจ่าย
book a ticket - order or reserve a ticket for the future จองตั๋ว
hoarding - buying a lot and keeping it without using it (because you expect the price to go up in the future) กักตุน
conservation of water and electricity - การประหยัดน้ำและไฟฟ้า
utility bills - bills you get every month for electricity and water ค่าสาธารณูปโภค
authorities - the government, the people who control and govern some activity ผู้มีอำนาจ เจ้าหน้าที่
excise taxes - taxes on good that you buy ภาษีสำหรับสินค้าในประเทศ
government deficit - when the government spends more than they take in with taxes (so the government must borrow to pay for it) การขาดดุลของรัฐบาล
rationed - everyone limited in how much they can buy การปันส่วน การแบ่งสรร
subsidies - when the government pays part of the cost เงินช่วยเหลือ เงินสนับสนุน
a snap election - a quick election การเลือกตั้งที่จัดขึ้นก่อนสมัยการเลือกตั้ง (ตามรัฐธรรมนูญ)