New charter provision to curb spending on populist schemes

New charter provision to curb spending on populist schemes
Former Thai prime minister Thaksin Shinawatra.

The members of the Constitution Drafting Committee (CDC) yesterday wrote an article into the charter providing strict regulations governing the national budget and finances, aimed at preventing excessive populist spending by future governments.

The clause on state spending stipulates "financial boundaries that will not affect the country's fiscal discipline, and must consider the effectiveness and efficiency of the spending, and the necessity of the government agencies' spending".

The clause conforms to Article 35 of the 2014 interim constitution implemented by the National Council for Peace and Order (NCPO), which clearly states that the new constitution must provide a mechanism to curb populism or populist policies. They are defined as policies that damage the country's financial health in the long term.

The successes over the last decade of political parties loyal to former prime minister Thaksin Shinawatra - Thai Rak Thai, People's Power Party and Pheu Thai - in consecutive general elections have been attributed to their populist policies such as the Bt30 universal healthcare programme, financing for small and medium-sized enterprises, and the first-car-buyer and rice-pledging schemes.

The new clause also offers a clear definition of "state's money", which includes "borrowed money". Future governments must include the amount of "money borrowed" as "government spending" or "annual budget".

This is the first time in the country's history that a universal definition of "state's money" will be clearly written into the constitution.

The article on administration spending stipulates that all government spending must be accounted for in the "annual budget" or "additional annual budget".

CDC spokesman Kamnoon Sidhisamarn claimed that the measures were designed to prevent conflicts and problems created by past government such as excessive spending.

"The governments in 2009 and 2011 [led by the Democrat and Pheu Thai parties respectively] passed special bills to borrow money, and spent the money under a special law without accounting for it in the annual budget bill. The issue was widely debated from legal and academic viewpoints, as the governments claimed that money borrowed under such special bills shouldn't be categorised as 'state's money', and hence should not be included in the annual budget. To resolve this problem, the definition of 'state's money' is being clearly stated."

Kamnoon pointed to the Democrat-led government's "Thai Khem Khaeng" project in 2009 and Pheu Thai's "Two Trillion Baht" project as scenarios when previous governments passed "special bills" to borrow money, which was not accounted for in the annual budget.

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