The government may transform the Digital Wallet scheme into a direct cash giveaway, as economic stimulus is urgently needed. Funding has been reserved in the 2024 and 2025 budgets. However, the final decision will be made before the PM’s September policy statement.
There are strong indications that the Digital Wallet scheme pushed by the last government may be altered rather than being scrapped. At this time, it is thought the government may opt to transform the plan into a cash giveaway. Funding for the scheme has been reserved in the 2024 and 2025 budgets. At the same time, with a slow economic recovery taking shape, there is a growing need for economic stimulus. Certainly, the matter will be decided before Prime Minister Paetongtarn Shinawatra’s policy statement to parliament, which is due in September. On Tuesday, Deputy Minister of Finance Julapun Amornvivat, tipped for promotion in the new cabinet, signalled that a solution has been found to resolve ongoing doubts about the scheme’s viability.
There are indications that the Digital Wallet scheme may be adjusted into a simpler and less troublesome economic stimulus package. Certainly, part of this adjustment would involve distributing the funds in cash as opposed to digital tokens.
On Tuesday, the Director of the Budget Bureau Chalermpol Pensut, supported this proposal. He explained that there was no impediment to the budget for the Digital Wallet scheme being disseminated in cash. The original policy specified digital tokens and a convoluted system of redemption for retailers.
Government may simplify the Digital Wallet scheme to provide economic stimulus through cash instead
Presently, the Digital Wallet scheme has ฿122 billion in reserve. This has already been approved by parliament for the current year ending on September 30th. In addition, a further ฿152 billion for 2025 is being reviewed by parliament.
The 2025 budget is said to be at the committee stage and will pass shortly after its second and third readings. Mr. Chalermpol said all it takes is for the government to decide the parameters.
In short, the government may choose to target the stimulus measure at those most in need. At the same time, it could use the proven apps that have been used in the past to put economic stimulus into effect.
Economic commentators will certainly welcome this development. A key question about the Digital Wallet was the danger of a lack of participation from small businesses. In short, they would have had to wait to be paid for goods and services.
Cash handout may speed economic recovery and address concerns with the Digital Wallet’s implementation
On the other hand, a direct cash handout to those in need is bound to give a boost to the economy, which shows signs of slow recovery. A key consideration for the incoming government will be the speed of disbursement.
The ฿122 billion earmarked for 2024 must be spent by September 30th next, according to Mr. Chalermpol. In addition, this development may also help the government mend fences with the Bank of Thailand.
Previously, Governor Sethaput Suthiwartnarueput had expressed concerns about the blanket nature, extent, and cumbersome architecture of the Digital Wallet scheme.
Indeed, a key area to watch after the new government is appointed is its attitude and rapport with the Bank of Thailand.
Previously, Ms. Paetongtarn Shinawatra sparked controversy this year by openly questioning the desirability of an independent central bank. Nonetheless, it is anticipated that the Prime Minister and the new Pheu Thai-led government will focus instead on the appointment of a new central bank governor next year.
New government expected to address Digital Wallet concerns and implement direct economic stimulus soon
In the meantime, the government is being urged by the National Economic and Social Development Council (NESDC) to implement direct stimulus measures at this time.
This Tuesday, when he arrived at Government House, Deputy Minister of Finance Julapun Amornvivat, tipped for the top job at Finance, told reporters that the incoming government has a solution to the Digital Wallet conundrum.
On one hand, the government wants to be seen delivering on an election promise where the economy needs stimulus. On the other hand, it wants to conduct itself in as simple and straightforward a way as possible.
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When questioned if the Digital Wallet scheme was to be scrapped or fundamentally altered, Mr. Julapun would only repeat that a good solution has been found.
Certainly, the Budget Bureau boss saw no problem applying the Digital Wallet budget to distribute economic stimulus. In addition, he was confident the 2025 provision would be passed by parliament shortly. Furthermore, the new government is expected to be in place sometime in August.
After that, the official policy statement by the incoming prime minister, expected in September, should see the matter clarified.
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