Failure to pass the ฿500 billion borrowing decree could lead to the dissolution of parliament

May 30, 2021 at 2:09 am
by Joseph O' Connor
in Economy, Foreigners, More News from Thailand, Politics, Thailand
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Deputy Prime Minister Wissanu Krea-ngam has taken issue with the legal strategy of a former finance minister who has filed legal proceedings with the Administrative Court to have the decree rescinded. He says the action should have been filed with the Constitutional Court as the measure has already been processed by the cabinet and sent to parliament for consideration.

The top legal adviser to the government has told reporters that failure by the House of Representatives to ratify the borrowing decree for ฿500 billion agreed by the cabinet on May 18th and which is to be tabled for consideration by the parliament after the 2022 budget bill the week after next, could lead to its dissolution. He has also strongly defended the legality and probity of the measure after a former finance minister launched a court action to have it rescinded by the Administrative Court.

house-dissolution-if-500-bn-loan-bill-fails — Deputy Prime Minister Wissanu Krea-ngam told reporters on Wednesday that failure by the House of Representatives to pass the bill legislating for the ฿500 billion loan decree approved by the cabinet on May 18th could lead to the dissolution of parliament in accordance with constitutional norms and tradition. He also defended the legality of the provision which he said has been verified by the Council of State after legal proceedings were initiated at the Administrative Court by a former minister of finance to have the measure reviewed and rescinded.

Deputy Prime Minister Wissanu Krea-ngam has warned that failure to pass either the 2022 budget bill or the new ฿500 billion loan decree in parliament over the coming weeks could see the dissolution of the current Thai assembly.

He was speaking to reporters as he outlined the sequence of events in the House of Representatives where Speaker Chuan Leekpai has tabled the budget bill for consideration next week which is expected to be followed the week after by a draft bill ratifying the executive decree issued last week which authorises the Minister of Finance Arkhom Termpittayapaisith to borrow a further ฿500 billion to fund the government’s response to the third wave of the virus amid a tightening financial situation with diminished tax revenue due to contraction of the domestic economy.

Borrowing bill to follow debate of 2022 budget bill within days after it concludes later next week

The government’s legal adviser explained that the borrowing bill will follow the budget bill in short order giving parliamentarians enough time to consider its content but avoiding a delay and hiatus given the urgency of the situation. He emphasised that there would be ‘no delay’ in having the matter approved.

He anticipated that the bill should be passed after 4 or 5 days of debate and that the parliament may hear from the Finance Minister, Mr Arkhom, as well as the Minister of Energy and leader of the government’s economic team, Supattanapong Punmeechaow.

He confirmed that if the parliament failed to pass the bill then the borrowing provision would be rejected and could not proceed and responded in the affirmative when a reporter questioned if there is failure to pass a finance bill, could that mean parliament may be dissolved, he replied: ‘Yes, traditionally’.

฿500 billion borrowing decree provision is entirely legal says DPM Wissanu in response to legal suit

On Wednesday, the Deputy Prime Minister strongly defended the legality of the executive decree to borrow a further ฿500 billion. This came after a legal challenge was mounted at the Administrative Court in Bangkok against the decision of the cabinet on May 18th relating to the provision by former Finance Minister Thirachai Phuvanatnaranubala.

Mr Thirachai served the government of Yingluck Shinawatra from August 2011 to January 2012.

Former finance minister questions if the bill breached a 2018 law on the conduct of fiscal measures

The former Finance Minister and Security Exchange Commission chief said that the procedures and deliberation involved in making the decision by the government had breached the provisions of the State Fiscal and Financial Disciplines Act of 2018.

Ex minister seeks review of government’s actions

The ex-minister suggested that the speed and lack of notice associated with the decision to approve the borrowing measure had undermined the mechanisms and procedures outlined in the 2018 bill which sought to uphold strict financial discipline within the government and in public.

Measure confirmed by the Council of State

Mr Wissanu said the government and key officials had checked with the Council of State to ensure that all measures undertaken were strictly in accordance with the law.

The deputy prime minister also defended the ฿1 trillion loan facility approved by the government last year on the same basis. The former finance minister is also questioning that measure and seeking to have it too rescinded by the court.

Questioned legal strategy of Mr Thirachai

Deputy Prime Minister Wissanu also questioned the legal strategy being employed by the former finance minister.

He pointed out that the Administrative Court held no jurisdiction over the matter which has already been passed by the cabinet and is to be considered next by the parliament after the debate on the 2022 budget which is expected to run until the end of next week.

Opposition Pheu Thai Party highlights the risk of the government exceeding its 60% public debt limit

The opposition has already opened fire on the government’s financial manoeuvres with Deputy Secretary-general of the leading Pheu Thai Party, Pawat Ruangdejworachai, warning that the government was playing a very risky game as it was highly likely that public debt to GDP would exceed the 60% limit proscribed by law towards the end of the year.

The current provision, if fully drawn down, according to the government’s own information, will bring the official public debt level to 57% of GDP.

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About the Author

Joseph O' Connor

Joseph Anthony is an expat from Ireland who has lived in Thailand for the last decade. He has worked extensively in the media including editorial positions in Ireland and Thailand. He is focused on economic and business stories in Thailand as well as the expat lifestyle.

All posts by Joseph O' Connor