The cabinet meeting on Tuesday 21, December 2010 has come to the following decision:
The Cabinet approved the draft of the Royal Decree calling for the 2011 Ordinary session of the Parliamentary Assembly (from January 21, 2011, onwards), as proposed by the Office of Cabinet Secretariat. The draft is to be presented to His Majesty the King.
The Constitution of the Kingdom of Thailand has decreed that there must be at least one ordinary session of parliamentary assembly and one ordinary session of the assembly for lawmakers annually. The first day that the parliamentary assembly is called is to be considered as the first day of the ordinary session, according to the constitution. The incumbent parliament, under the 2008 Royal Decree Calling for Parliamentary Assembly, convened its first assembly on January 21, 2008. Thus, it is only appropriate that the 2011 ordinary session of parliamentary assembly is to convene from January 21, 2011 onwards, in accordance to article 127 of the Constitution of the Kingdom of Thailand.
The Cabinet approved the annual 2011 monetary policy goal, as proposed by the Ministry of Finance.
According to the 1942 Bank of Thailand Act, amended by the 2008 additional amendment to Bank of Thailand Act (Fourth Edition), article 28/8, the Monetary Policy Committee(MPC) is tasked with compiling next year’s annual goal for monetary policy with an joint agreement with the Minister of Finance while the Minister of Finance is tasked with proposing the agreed goals to the Cabinet for approval.
The Minister of Finance and the Monetary Policy Committee have agreed on the goal to be proposed to the cabinet, and the following is the synopsis of the proposal.
1. The annual 2011 goal for monetary policy is to keep the inflation rate capped at the range between 0.5% and 3% year on year, which is the same goal used for 2010 that the Cabinet approved on December 22, 2009. This is to foster continuity in determining the goal for monetary policy, making it predictable for entrepreneurs and the general public who could speculate the impacts monetary policies have on businesses, and the decision is expected to build up confidence in government policy and to support the expansion of the economy, consistent to the current Thai economic situation.
2. The Minister of Finance and the Bank of Thailand Governor, as the chairs of the MPC, have signed on the agreement to set the annual 2011 goal for monetary policy.
The Cabinet approved the extension of the measures aimed to reduce the people’s expenses, extending them to February 28, 2011. Following the mantra used in the measures to reduce the people’s expenses in the past, the state enterprises have been tasked with the responsibility in implementing the measures. The relevant state enterprises are the Metropolitan Electricity Authority(MEA), the Provincial Electricity Authority(PEA), Bangkok Mass Transit Authority(BMTA), and the State Railways of Thailand(SRT), all of which have been assigned to take out loan to fund the measures implemented in the past (from February1, 2009, to September 30, 2010). The Budget Bureau has been assigned to consider allocating annual budget to repay the loans, both principal, interests, and costs of borrowing, to all four state enterprises.
Synopsis/Background and Legal Issues
1. Impact on State Enterprises
The implementation of the measures has incurred debts for the state enterprises to fund the programme as the government cannot immediately fund allocates the budget to fund the measures. All together, the state enterprises have borrowed 36,182.82 million Baht, and 44.92% of which, or 15,896.78 million Baht, have been paid by the Budget Bureau already.
2. Impact on the Fiscal Position
The implementation of the measures in the past (from February 1, 2009, to September 30, 2010) has incurred fiscal liability to the treasury, which is worth 36,182.82 million Baht in total, or 1,809.64 million Baht per month on average. The Budget Bureau has allocated the 15,896.78 million Baht worth of compensation, or 44.92% of the total liability, to the state enterprises.
3. Extension for the Measures to Reduce People’s Expenses
It should be noted that the implementation of the measures have been successful in directly alleviating the people’s burden. It is also the case that there are many people benefiting from the measures, so the Ministry of Finance has considered and resolved that it is appropriate to extend the measures which are the following.
3.1. Principles for Implementing the Measures
(1) Electricity bill reduction, implemented through MEA and PEA, is responsible by the state, with the condition being the eligible household uses no more than 90 units of electricity and that any MEA or PEA registered resident of rented apartment or residence, which costs no more than 3,000 Baht per month, uses the electricity within the limit of 90 units.
(2) Bus fare measure, operated via BMTA, is responsible by the state, which provides 800 free public buses in 73 routes.
(3) 3rd class
train fare, operated by SRT, is responsible by the state which provides free 164 3rd class trains and long-distance 3rd class trains and free 8 commercial trains daily.
3.2. The period for implementation: from January 1 to February 28, 2011
3.3. Cost for the implementation: estimated at 3,085.88 million Baht.
The Cabinet acknowledged the impact from the increase in the minimum wage and producer price, as proposed by the Ministry of Commerce.
Synopsis
The Ministry of Commerce reported the following impacts from the increase in minimum wage.
1. Fact
1.1. Cost Structure
In general, controlled and regulated goods include cost of raw material, wage, production cost, managing cost, and financial cost. Raw material cost would account for 30-90% depending on the type of goods in each industry, and whether it is sourced from domestic or international market.
1.2. Increase in Minimum Wage
According to the resolution of the Central Wage Committee that increased the minimum wage by 8-17 Baht to 159-221 Baht, which is to come into effect on January 1, 2011, the producer prices in food and consumer goods markets would be affected.
1.3. Change in Fuel and Energy Prices
The increase in energy prices would inevitably raise the cost of logistics. In the late 2009 ( the subsidized period), the price for diesel was at 27.63 Baht per liter. At present ( December 2010), the price for diesel has risen to 29.99 Baht per liter, which is an 8.54% increase.
1.4. Price Cap
The Ministry of Commerce has made it a policy to have manufacturers of consumer goods capped their prices, from late 2009 to the end of 2010. During this period, the prices of steel, nickel, chemical fertilizer, unrefined palm oil, and raw rubber sheets, have risen.
2. Relief for the People
The Ministry of Commerce has compiled a plan to accommodate the regulation of prices of goods and to help the people, both in the agricultural sector and the general public.
2.1. Help for Farmers
The monitor centre for agricultural products, especially chemical fertilizer and chemical products, is to be established.
There is to be regulation to ensure fairness in agricultural trade, ensuring that price tags are put in place in an apparent manner. There is to be check on weighting scale, humidity indicator, and flour percentage measurement.
The measure to link up the Market and to promote agricultural trades, especially for vegetables, fruits, eggs, and pork, so that ordinary market mechanisms can be supported by the expansion of distribution channels, reducing the clogging of goods in their origin while increasing the volume of goods sold at destination in order to avoid the downward pressure on the price and profiteering during seasonal period, such as vegetarian festival. It is to also solve the problem during oversupply and the problem of substandard quality through coordination of links between manufacturers.
2.2. Help for Consumers
Help for consumers cam be done through the following.
Origin: entrepreneurs are required to notify and request for approval before raising the price. Also, there is to be close monitor and evaluation of the situation of the prices of raw material while check on weight of packaged good and packaging is needed as well.
Destination: check on price tags and movements of retail prices and volume of goods is to be done in order to prevent hoarding of goods and profiteering.
2.3. Expense Reduction for the People
Consumer goods entrepreneurs are invited to consult on the direction and approach of price regulation to ensure fairness in the system at large and to protect the people’s interests. There are still many goods whose prices can be capped, such as, daily consumer goods, foods and drinks (excluding palm oil), construction materials, and agricultural products (excluding chemical fertilizers) as the market is very competitive.
Proposal on the Draft of the Strategy for the Prevention and Resolution to the Problem of Unprepared
The Cabinet approved the draft of the strategy for the prevention and resolution to the problem of unprepared pregnancy amongst children and youths, which is to be proposed to the Cabinet for the approval to become a national agenda so that all sectors can pay attention and move forward to just and proper practices., as proposed by the Ministry of Social Development and Human Security.
The Ministry of Social Development and Human Security reported:
1. The 1/2009 meeting of the national committee on the policy and strategy for the advancement of women, convened on December 21, 2009, and chaired by the Prime Minister, resolved to assign the ministry to be the host, coordinating with agencies, in preventing and resolving the problems of unprepared pregnancy amongst children and youths.
2. The ministry has compiled the draft of the strategy for the prevention and resolution to the problem of unprepared pregnancy amongst children and youths, taking in the opinions from different sectors. The draft has been forwarded to the national child protection committee, chaired by the Minister of Social Development and Human Security who gave approval during the 3/2010 meeting on November 22, 2010 for the following 6 sub-strategies.
2.1. Prevention strategy
2.2. Relief and rehabilitation strategy
2.3. Strategy to support the role and knowledge of children and youth thought leaders
2.4. Strategy to eradicate of bad influences from the media
2.5. Strategy to push forward the policy
2.6. Information survey, system development, and follow up strategy
The Cabinet has assigned relevant government agencies to coordinate and follow up the result from the visit to the Republic of Italy by the Minister of Foreign Affairs, from September 30 to October 3, 2010, as proposed by the Ministry of Foreign Affairs. The frame of the authority granted is as followed.
1. Objective of the Visit
1.1. To be the Prime Minister’s representative in delivering a speech for and attending the Alliance of Democrats International Conference, on October 1, 2010.
1.2. To strengthen the bilateral relation between Thailand and Italy, which is a country that has an important role, both economically and politically, in the European Union. Also, to seek new co-operations and learn the approach used in Italy’s specialisations as well as to clarify and create an understanding with the government, private, and media sectors of Italy in respect to the political situation in Thailand, which is implementing the national reconciliation plan and economic stimulus package.
1.3. To sign the Memorandum of Understanding on bilateral relation between the Ministry of Foreign Affairs of the Kingdom of Thailand and the Italian Ministry of Foreign Affairs.
1.4. To strengthen the relation with Food and Agriculture Organization (FAO) and The World Food Programme
1.5. To discuss with Team Thailand Agency and the Thai Consult and Honourary Consult in Italy
1.6. To discuss with rulers of Vatican, which is additional duty.
2. Participating the conference titled “Security, Development and Democracy” and deliver a speech titled “Asia : Why Economic Development and Democracy need to move forward together?”
--Cabinet Meeting (Abhisit Vejjajiva) December 21, 2010--