The Ministry of Finance is proposing a new guideline on the allocation of the public welfare budget to reduce the burden on government expenditure, according to a Finance Ministry source who requested anonymity.
The source said some items under the public welfare budget are redundant and may not match the target group who are in greater need of receiving welfare payments. For example, the old age allowance (OAA) scheme is currently paid in progressive rates between 600-1,000 baht per month depending on the age of the recipient. People aged between 60-69 receive 600 baht; those aged 70-79 receive 700 baht; those aged 80-89 receive 800 baht; and those aged 90 and above receive 1,000 baht per month.
There are currently 11 million people receiving the OAA, using an annual budget of around 80 billion baht.
However, if the OAA is limited to only low-income elderly people, or a person who holds a state welfare card with an annual income of no more than 100,000 baht per person, there would only be 5 million OAA recipients, reducing the state budget by half to only 40 billion baht.
A ministry source added that targeting people who should receive state welfare is a rational approach which many countries have deployed after their governments used a large amount of money to support the economy and society during the pandemic.
If an OAA of 3,000 baht a month were available to those holding a state welfare card, it would use an annual budget of only 180 billion baht, whereas such a disbursement to all people aged 60 and above would increase to 500 billion baht.
Under the targeted approach, the new government could still increase the welfare budget to a higher OAA per person without incurring too much burden on the state budget.
In addition, if the redundancy of some state welfare provisions was reduced it could save more money. For example, if financial assistance and other relief measures were limited to only those who hold a state welfare card, it would provide a big cut in government spending.
According to an economic outlook assessment, the Thai economy is projected to continue its post-pandemic recovery with expansion of 3.6% this year. As a result, the direction of fiscal policy from now on will return to normal, with the focus on fiscal strength in terms of increasing revenue collection and reducing unnecessary spending, including reducing redundant expenditures, and pursuing targeted fiscal policies.