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PM rules out dissolving House if bill fails

Prime Minister Yingluck Shinawatra insists she will not dissolve the House even if parliament fails to pass the 2-trillion-baht borrowing bill for the government's infrastructure development projects.

• Published: 19/09/2013 at 11:49 PM
• Newspaper section: topstories
• ที่มา: http://goo.gl/GDYUEi
• 

Opposition finance expert Korn Chatikavanij spoke Thursday against the proposal to borrow 2 trillion baht for infrastructure projects, proposing a cut to 400 billion baht, with further projects financed through regular budget channels.

Ms Yingluck stressed Thursday that that the bill, which will authorise the Finance Ministry to seek the loans, is necessary to develop the country's infrastructure.

She said that executives of major banks have voiced support for the projects, which would benefit the country's economic growth, during a meeting with them on Wednesday.

She said if the projects are implemented through the ordinary budgetary system, they would not be able to proceed and the budget would not be enough to cover all the expenditure in a continuous manner as required for an overhaul on this scale.

The government has placed an emphasis on monetary discipline and the banks who lend the money will also help check the government's fiscal discipline, she said.

The House of Representatives deliberated the 2-trillion-baht loan bill in its second reading Thursday.

Democrat Party leader and former prime minister Abhisit Vejjajiva told the session that the loan bill will sink the country deep into debt for the next 50 years.

Mr Abhisit also told the House of Representatives that the bill lacks necessary details about the projects to be funded in order to ensure the spending is transparent.

More than 100 lawmakers, including members on the government side of the House, had reserved their right to debate the bill.

For its part, the opposition would do its best to prevent the "loan storm" from hitting the public, Mr Abhisit said.

The Democrat leader said the opposition party supports many of the projects proposed under the borrowing bill, but on the condition that they must be funded through the ordinary budgetary system, he said.

Some of the projects that have been proposed by the government were not ready to be implemented, he added, claiming that only 300 to 400 billion baht is needed for the projects that are ready to proceed, while the others could be implemented through the ordinary annual budget.

"We should not support a bill which evades the ordinary budgetary process," the opposition leader said.

Democrat list-MP and former finance minister Korn Chatikavanij proposed a change to the borrowing bill by slashing the 2-trillion-baht amount to only 400 billion baht.

He said the government can still seek loans of 1.6 trillion baht through the ordinary budgetary system over the next seven years.

The government can still obtain adequate loans via a budget deficit, or borrowing, to finance its infrastructure development plan, he added.

Based on the state debt-ceiling control law, for example, the government can have a budget deficit of 250 billion baht for fiscal year 2014 year while it plans to use only 120 billion baht to finance its infrastructure development.

In 2015, the government has room for a budget deficit of 600 billion baht while the government planned to use only 240 billion baht for infrastructure investment, Mr Korn said.

The year that the government plans to invest most is 2017 with 400 billion baht, and the government can bring the deficit up to 700 billion baht, he added.

"This shows that the government has no need to borrow through a special bill but it can be through the ordinary annual budget bill," Mr Korn said.

"The more important concern is not the amount of money but the efficiency of using the money," he said.

According to the state agencies which are taking out the loans, the projects which are ready to proceed comprise only 20% of the total 2.2 trillion baht, or 400 billion baht.

"This is why I propose to cut borrowing to only 400 billion," he said.

"The government is trying to create the [misleading] impression among the public that anyone who opposes the law is obstructing progress," Mr Korn said.

Rebutting the opposition's criticism, Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong said that even though the bill seeks to borrow outside the normal budgetary means, the legislation has been tabled to parliament for scrutiny to ensure transparency and care.

Mr Kittiratt admitted the government's infrastructure projects could be implemented through annual budget allocations, but said they would then lack the necessary continuity.

"Pushing the borrowing bill does not mean the government is trying to use off-system money. On the contrary, the bill which is being scrutinised by lawmakers shows the government is following the law and is being transparent," he said.

The House Thursday voted 288 to 122 to approve Section 1 of the bill and voted 292 to 111 in favour of Section 2.