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Thai PM Wins Parliament Backing for $93 Billion Budget Plan
(Bloomberg) -- Thailand’s Prime Minister Prayuth Chan-Ocha won the parliamentary backing for a draft $93 billion annual budget, surviving a major test for his government amid growing internal divisions in the ruling coalition.
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The spending plan for the fiscal year starting Oct. 1 received the support of 278 lawmakers. A total of 192 voted against it and 2 members abstained after a three-day debate, according to the results of a parliamentary voting early on Friday.
The fate of the budget was thrown into doubt after some smaller parties tried to extract concessions and distanced themselves from Prayuth’s government, which has struggled to revive the pandemic-battered economy ahead of elections that must be called by March next year.
About three dozen lawmakers, including a breakaway faction of the ruling Palang Pracharat Party, had kept their options before the vote. But the passage of the 3.19 trillion baht ($93 billion) budget plan, which also includes a deficit of 695 billion baht, showed coalition managers were successful in containing the dissent.
“The noises from the different factions are just to push for more budget for their groups so they could mobilize votes for the next election, rather than a real effort to bring down the government,” said Titipol Phakdeewanich, dean of the political science faculty at Ubon Ratchathani University.
A rejection of the budget plan would have forced Prayuth to resign or call an early election. Before the vote, Tim Leelahaphan, a Bangkok-based economist at Standard Chartered Plc, said the risk was low and “political noise is likely to rise in the second half as pre-election activity begins.”
Opponents Gather
The opposition leaders targeted Prayuth during the debate, accusing him of taking on more debt to finance routine expenses as opposed to investing in projects that can create long-term benefits for the economy. They also were worried about the ruling parties using the money to promote projects that will benefit them electorally.
Prayuth had defended the budget, saying the proposals are meant to support the post-pandemic economic and social recovery. A large deficit financing is needed again as Southeast Asia’s second-largest economy continues to face threats from a volatile global financial and economic system, according to the premier.
Thailand is set to post the slowest pace of growth in the region this year as it still grapples with the devastating impact of the pandemic on its tourism industry and high inflation. Its public debt has ballooned to about 61% of the gross domestic product from about 41% before the pandemic as it borrowed about 1.5 trillion baht to fund Covid stimulus measures.
The path ahead is seen as rocky for Prayuth who has been at the helm for eight years, first as a coup leader and then winning the elections in 2019 under a military-drafted constitution.
Opposition parties are planning to file a no-confidence motion later this month to expose what they say is the government’s alleged mismanagement of the economy, failure to contain soaring prices and inadequate pandemic relief measures.
The government will survive the budget debates and any no-confidence motion as it has the support to stay in office until the end of its term next year, according to Deputy Prime Minister Prawit Wongsuwan.
The budget plan will now be sent to various committees for scrutiny. The house will take up the bill for a second and third reading in August before sending it to the senate for its consideration and approval.
“With the infighting in the ruling coalition and the opposition’s growing threats of “no” votes, we think the political developments warrant close monitoring in coming months,” Nomura Holdings Inc. analysts Charnon Boonnuch and Euben Paracuelles said in a note. “The government’s sharply falling popularity also suggests a highly uncertain outcome at the upcoming elections.”
(Updates and recasts with parliament vote outcome.)
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