Higher tax, welfare urged
Govt must tackle ageing society, scholar says
The military government has fallen into the same populist trap as its predecessors over economic policy and lacks the necessary fortitude to raise taxes and increase investment in the welfare system amid a rapidly ageing population, says an academic.
Praipol Koomsup, Thammasat University’s professor of economics, said Thailand’s ageing society will result in the elderly comprising 20% of the population over the next 20 years, and will strain the government’s ability to provide care for them and still live within its means.
“If the birth rate increased to two babies per woman, we could have a labour force big enough to support the older population,” he said.
Mr Praipol said he is concerned half of the country is still not covered by universal health insurance, especially the rural and urban poor and farmers.
He was speaking at a recent seminar to commemorate what would have been the 100th birthday of former Thammasat University rector and the former Bank of Thailand governor Puey Ungphakorn who died in exile 17 years ago.
Puey hoped to create a welfare system that would foster a cohesive and caring society, but his dream has yet to be realised, said Mr Praipol.
Eight million people above 60 years receive a welfare payment of between 600 baht and 1,000 baht per month depending on their age, but the government needs t o come up with a more sustainable system, he said.
“As the government is forced to shoulder more costs — as the ageing population rises and work force stagnates — we need to increase tax revenue,” Mr Praipol said.
National Economic and Social Development Board (NESDB) figures show Thailand spends 9.3% of its GDP on health care.
In the next 12 years, the economist said, the health burden would rise to 15% of GDP, of which 9% would be shouldered by the government, equivalent to 53% of the government’s tax revenue.
“Our economic growth over the past decade was 3.2% per year, so how can we get 4% growth as the NESDB hopes?” he said.
“I can’t see either the current government or its successor having the political courage to raise the value-added tax.
“Even the land and building tax pending a decision by the National Legislation Assembly is moderate and not the progressive rate that we’d hoped for,” the economist said.
He was disappointed the military government, despite having broad power, has yet to initiate a policy measure that would address the issue while attempting to curry favour with the public.
“What we see now is populist measures such as those imposed like their predecessors such as registering the poor and the Pracha Rath [people’s state] projects,” he said, referring to Prime Minister Gen Prayut Chan-o-cha’s move to bring together state agencies, the people and private sectors to drive development projects.
Puey’s vision of seeing Thais making their own choices in economic, social and political life has also yet to materialise, Mr Praipol said.
“Several improvements that Puey hoped for can be partially seen in areas of health and education but in term of social justice and political liberty, it seems a long long way off,” added Mr Praipol.