Mr. Speaker;
The Council of Ministers would like to present to you draft of the Expenditure Budget Act for Fiscal Year B.E. 2557 with the following principle and rationale:
Principle
Allocation of the annual budget for FY B.E. 2557 not exceeding the amount of 2,525,000,000,000 Baht (Two Million Five Hundred Thousand Twenty Five Billion Baht). Two Million Five Hundred Eleven Thousand Five Hundred Seventy Six Million Three Hundred Twenty One Thousand Seven Hundred Baht (2,511,576,321,700 Baht) of the aggregate budget expenditure will be for the expenditure of official agencies, state enterprises, and other agencies, and 13,423,678,300 Baht (Thirteen Thousand Four Hundred Twenty Three Million Six Hundred Seventy Eight Thousand Three Hundred Baht) will be returned to the treasury reserves.
Rationale
1) To allocate budget of FY B.E. 2557 to official agencies, state enterprises, and other agencies for their expenditure on state affairs
2) To be abided by the Constitution of the Kingdom of Thailand and the law on treasury reserves stipulating that budget expenditure be allocated for the return of expended treasury reserves.
Mr. Speaker;
The Government would like to deliver a presentation on gist of the annual expenditure budget for Fiscal Year B.E. 2557 as follows:
Draft of the Expenditure Budget Act for Fiscal Year B.E. 2557 presented to you and the honorable members of the House has been compiled on the basis of “national strategies” through which the Government intends to upgrade the country to a higher standard in all dimensions in order to enhance national competitiveness, and to meet the demands of the people all over the country both in economic, social, security, and environmental aspects with the two primary objectives:
First: To implement policies and measures for economic and social problem solutions and rectifications as a carried-over effort from the past fiscal year. Emphasis will be made on the integration of work in all dimensions and the establishment of participatory development alliances from all sectors.
Second: To support the mobilization of national strategies, and the realization of ASEAN Community as well as the increase of efficiency and good governance of the official system.
I would like to provide you with the overview of economy, and national monetary and fiscal policies as supporting information for the Draft of the Expenditure Budget Act for Fiscal Year B.E. 2557 as follows:
Economic Overview
During the first quarter of B.E. 2556 (2013), Thai economy faced with the recession due to delay in the recovery of global economy as well as the recession of product prices in the global market. Countries with major economic power have given priority on an increase of money supply in their monetary policy to stimulate economic growth which resulted in the capital inflows to Thailand and the Asian region, and has rapidly put pressure on the appreciation of Baht.
Nevertheless, Thailand’s economy in 2013 is expected to expand at the favorable rate of 4.2 - 5.2 per cent and an inflation rate of 2.3 -3.3 per cent. The supporting factors will be global economic recovery in the latter part of the year, and a rebound in electronic products particularly in the US market which is expected to revitalize Thailand’s production and export sectors, as well as an increase of investment from the private sector by 119.9 per cent in B.E. 2555 (2012) and still continues to grow in B.E. 2556 (2013).
In addition, expenditure stipulated under the Royal Decree on Investment Loan for Water Resource Management and Future Development, and investment plan stipulated under the Act on authorization of Ministry of Finance to seek loan for national transportation infrastructure development will also be the factors to support further economic expansion.
On the economic outlook of B.E. 2557 (2014), Thailand’s economy is expected to expand at the rate of 4.0 to 5.0 per cent and inflation rate at 2.7 to 3.7 per cent with constant increase of domestic demand both in consumption and private sector’s investment as a supporting factor, as well as increasing public expenditure and investment mobilized by the aforementioned Royal Decree and Act on investment loan. At the same time, foreign economic outlook will become more favorable owing to the comprehensive recovery of global and Asian economy which will result in the expansion of export during the latter year of B.E. 2556 (2013) and B.E. 2557 (2014).
With an ongoing fluctuation of global economy, strengthen domestic economy through stimulation of appropriate trade and investment will lead to less reliance of export. Meanwhile, the Government puts an emphasis on short-term measures to promote economic stability as a foundation to push forward the country’s sustainable and balanced growth in the long run.
Fiscal status and policy
For the Fiscal Year B.E. 2557 (2014), it is expected that the Government will collect an estimate of 2,384,000 million Baht for the net revenue. After deducting the allocation of 109,000 million Baht to the Local Administrative Organizations as specified by the Determining Plans and Process of Decentralization to Local Administrative Organization Act B.E. 2542 (A.D. 1999), net revenue to be allocated for the Government’s expenditure amounts to 2,275,000 million Baht, equivalent to 17.2 per cent of the Gross Domestic Product.
The Government sets the following policies and approaches for the management of public expenditure for FY B.E. 2557:
First: Priority is given to operations that are in compliance with national strategies, strategies related to the establishment of ASEAN Community in 2015, Government’s major policies, and integrative missions of specific areas with an aim to cut spending, generate more income, and provide more opportunity to the people.
Second: Priority is given to efficiency enhancement of budget expenditure together with consideration for other financial sources, as well as integrative operation at a local level to do away redundancy.
Third: Promote fiscal efficiency among local administrative organizations in order to upgrade public service management, reduce fiscal disparity among the local areas, and improve revenue collection efficiency and expenditure effectiveness.
Fourth: Adopt deficit budget policy with a consideration on the fiscal sustainability and necessity of public sector’s spending in order to mobilize the expansion of Thailand’s economy. The treasury balance as of May 20, 2013 amounts to 250,935.40 million Baht.
Monetary status and policies
The Government’s monetary policy in B.E. 2555 (2012) was more loose to support the restoration of the economy which has been affected by the great floods during late 2011. However, in the latter part of 2012, Thai economy was affected by the implementation of US and Japanese monetary policy to increase money supply which resulted in unusual inflow of capital in public stock and bond markets. The trend has been carried over to the first half of 2013 and has caused continuous and rapid Baht appreciation. With the vulnerability and uncertainty of global monetary system, the Government puts an emphasis on the maintenance of economic stability. The cabinet has recently approved a framework for the maintenance of economic stability, year 2013, as a guideline for concerned agencies on monetary measures, fiscal measures, and other specific measures with intent to boost confidence that Thai economy will grow with stability and security.
At present, Thailand’s monetary status is considered stable with a surplus current account balance. Foreign exchange reserves at the end of April 2013 amounts to 178,374.9 million US Dollars, thrice as much of outstanding short-term foreign debts. Financial institutions’ non-performing loan rate is low while the risk reserve is still high, reflecting the stability of the whole monetary system.
Gist of the draft Expenditure Budget Act for Fiscal Year B.E. 2557
Mr. Speaker;
The draft Expenditure Budget Act for Fiscal Year B.E. 2557 proposed to the honorable members of the House for the amount of 2,525,000 million Baht has been compiled under the deficit budget policy with the expected net revenue of 2,275,000 million Baht, and borrowing for the balance of deficit budget at the amount of 250,000 million Baht. Appropriation of the aforementioned budget is classified as regular expenditure (2,017,244 million Baht or 79.9 per cent of the aggregated budget); expenditure to return to the treasury reserves (13,423.7 million Baht or 0.5 per cent of the aggregated budget); investment expenditure (441,510.40 million Baht or 17.5 per cent of the aggregated budget); and loan principal repayment (52,821.90 million Baht or 2.1 per cent of the aggregated budget).
Eight strategies and a list of expenditures on general administration are set for the budget appropriation of FY B.E. 2557. Important aspects of the strategy can be summarized as follows:
1st Strategy: Accelerate national development and prepare for the ASEAN Community. Thailand will be prepared for the changes both in the internal and external context, as well as the realization of ASEAN Community in 2015. The amount of 145,006.9 million Baht, equivalent to 5.7 per cent of the total budget, is allocated for this strategy and can be classified by the following programs:
1.1 Preparation for the ASEAN Community - 8,039.7 million Baht
1.2 Development of handicrafts and community products - 1,719.4 million Baht
1.3 Promotion of small and medium enterprises - 1,797.2 million Baht
1.4 Promotion of agricultural products and food industry - 7,455.6 million Baht
1.5 Welfare of children, women, the elderly, the underprivileged and the handicapped - 78,502.9 million Baht
1.6 Rectification and development of southern bordering provinces - 25,921.1 million Baht
1.7 Increase of income from tourism and services - 11,617 million Baht
1.8 Improvement of labor force quality/ migrant worker management/ prevention of human trafficking - 2,353.2 million Baht
1.9 Connection of transport system and information technology - 7,600.8 million Baht
2nd Strategy: National security. The amount of 210,783.5 million Baht, equivalent to 8.4 per cent of the total budget, is allocated for this strategy and can be classified by the following programs:
2.1 Upholding, protecting and preserving the monarchy - 13,670.8 million Baht
2.2 National reconciliation and democracy restoration - 421.8 million Baht
2.3 Enforcement of national defense system - 181,006.4 million Baht
2.4 Maintenance of domestic order - 15,684.5 million Baht
3rd Strategy: Economic growth with stability and sustainability. The amount of 343,746.7 million Baht, equivalent to 13.6 per cent of the total budget, is allocated for this strategy and can be classified by the following programs:
3.1 Management of sustainable macro-economy - 29,462.1 million Baht
3.2 Improvement of production efficiency and creating value of the agricultural sector - 33,044.1 million Baht
3.3 Promotion of agricultural commodity prices - 85,276.2 million Baht
3.4 Elevation of people’s income and purchasing power - 44,327.5 million Baht
3.5 People’s access to financial sources - 15,379.2 million Baht
3.6 Elevation of competitive capability of the industrial sector - 4,369.3 million Baht
3.7 Improvement of efficiency in the marketing, trading and investment sectors - 8,036.2 million Baht
3.8 Development of tourism and services - 2,624.5 million Baht
3.9 Promotion and development of sports and recreation - 9,393.8 million Baht
3.10 Development of infrastructure - 102,019.1 million Baht
3.11 Development and improving efficiency in energy consumption - 1,614.5 million Baht
3.12 Development of information and communication technology - 8,200.2 million Baht
4th Strategy: Education, virtue, ethics, quality of life and equality in the society. The amount of 849,861.9 million Baht, equivalent to 33.7 per cent of the total budget, is allocated for this strategy and can be classified by the following programs:
4.1 Increase of education opportunity and development - 395,787.3 million Baht
4.2 Provision of support to the arrangement of basic education - 91,721.5 million Baht
4.3 Development of public health - 44,832.2 million Baht
4.4 Development of health insurance system - 270,916.2 million Baht
4.5 People’s access to justice system - 845.8 million Baht
4.6 Prevention and suppression of corruptions and reprehensible behaviors in the public sector - 505.5 million Baht
4.7 Prevention, suppression, and rehabilitation of drug addicts - 10,146.7 million Baht
4.8 Increase of efficiency on labor protection management - 18,664.4 million Baht
4.9 Preservation, promotion and development of religions, arts, and culture - 8,907.9 million Baht
4.10 Improvement of security in life and society - 7,534.4 million Baht
5th Strategy: Conservation and rehabilitation of natural resources and environment. The amount of 112,288.5 million Baht, equivalent to 4.4 per cent of the total budget, is allocated for this strategy and can be classified by the following programs:
5.1 Prevention and mitigation of climate change problems - 1,147.8 million Baht
5.2 Integrative management of water resources - 59,871.9 million Baht
5.3 Natural resources preservation and management - 23,457.1 million Baht
5.4 Environmental management - 4,071.1 million Baht
5.5 Disaster management - 23,740.6 million Baht
6th Strategy: Management of science, technology, research, and innovation. The amount of 21,323.8 million Baht, equivalent to 0.8 per cent of the total budget, is allocated for this strategy and can be classified by the following programs:
6.1 Promotion of research and development - 12,202.6 million Baht
6.2 Development of science, technology and innovation - 9,121.2 million Baht
7th Strategy: Management of foreign policy and international economic affairs. The amount of 9,004.5 million Baht, equivalent to 0.4 per cent of the total budget, is allocated for this strategy and can be classified by the following programs:
7.1 Promotion of international relations and protection of national interests - 9,004.5 million Baht
8th Strategy: Administration of state affairs with good governance. The amount of 351,339.9 million Baht, equivalent to 13.9 per cent of the total budget, is allocated for this strategy and can be classified by the following programs:
8.1 Law reform and development of judicial processes - 81,723.3 million Baht
8.2 Improvement of government’s administration - 50,896.4 million Baht
8.3 Promotion of decentralization to local administrative organizations 160,407.8 million Baht
8.4 Development of provinces and clusters of provinces - 18,170 million Baht
8.5 Support on operations of the parliament, courts, and the independent bodies and agencies under the Constitution - 18,170 million Baht
Expenditures on general administration: The amount of 481,644.3 million Baht, equivalent to 19.1 per cent of the total budget, is allocated for this strategy and can be classified by the following programs:
9.1 Administration in cases of emergencies or necessities - 74,175 million Baht
9.2 Administration of the public sector’s personnel - 208,184 million Baht
9.3 Management of public debts - 185,861.6 million Baht
9.4 Expenditures to replenish treasury reserves - 13,423.7 million Baht
Mr. Speaker and honorable members of the House;
Gist of the draft Expenditure Budget Act for Fiscal Year B.E. 2557 presented to you by the Government is only the significant parts worth mentioning. Rest of the detail is stated in the budget document given to all the honorable members.
I and the Council of Ministers fully realize that administration of state affairs under the challenging context and rapid changes needs clear and explicit national strategies to create competitiveness and sustainable happiness for the Thai people. The draft Expenditure Budget Act for Fiscal Year B.E. 2557 proposed herewith has been compiled with an aim to concretely mobilize “national strategies”. Therefore, I sincerely hope that Mr. Speaker and the honorable members of the House will endorse and acknowledge in principle the draft Expenditure Budget Act to be the Government’s guideline for the disbursement of state budget for the best interests of the country and its people.
Thank you very much.