Thai government's $115 billion budget clears first parliamentary vote
BANGKOK, May 31 (Reuters) - The Thai government's 3.78 trillion baht ($115 billion) budget for the 2026 fiscal year passed its first parliamentary vote on Saturday, but there will be a series of further votes before it can be enacted.
After a four-day debate, the draft budget bill, aimed at supporting a sluggish economy facing steep U.S. tariffs, passed with 322 votes in favour and 158 against. The Pheu Thai Party-led government has a majority in the House of Representatives, but there have been some tensions in the coalition.
The budget vote is crucial to the government as a defeat could have forced Prime Minister Paetongtarn Shinawatra to either resign and make way for a new premier elected by parliament, or dissolve the house and call a general election.
The budget will still need to pass second and third readings in the lower house, expected in August, before being sent for Senate and royal approval. The 2026 fiscal year starts on October 1.
($1 = 32.85 baht)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
an hour ago
- Reuters
Thailand's stalled cash handout scheme sours voters on ruling party
BANGKOK, June 2 (Reuters) - Rungthiwa Pimphanit waited months for a long-promised cash handout of 10,000 baht ($307) from Thailand's ruling party, which she backed in 2023 elections, but now the scheme to stimulate a stalling economy has been put on ice. "I'm very disappointed and angry," said the 34-year-old government employee from the northeastern province of Nong Bua Lam Phu, who had counted on the money to pay for her son's school supplies. "There's no way I will vote for them again." Rungthiwa's hopes withered last month after news that the scheme, a key election plank of the ruling Pheu Thai party, would be delayed, fuelling doubt about any recovery in southeast Asia's second largest economy after years of tepid growth. Prime Minister Paetongtarn Shinawatra blamed steep tariffs proposed by the United States, but the delay to her government's flagship programme, on which it has already spent 174 billion baht ($5.3 billion), poses a major political risk, say analysts. "No one will believe anything they say," said Thanaporn Sriyakul, director of the independent Political and Policy Analysis Institute. "The government must keep its promises to the people during the campaign. If they can't do what they said, it's over." The government still has time left in its term, said spokesperson Jirayu Houngsub, reiterating that the scheme had only been postponed. The next polls are two years away. "By that time, if the economy is good, there may even be something more than this programme," he told Reuters. The handout scheme is popular across Thailand, with its continuation backed by about 60% of 1,310 respondents in a May survey by the National Institute of Development Administration, while about 46% said they would be angered if it was scrapped. "I'm upset," said 52-year-old Sathanee Siriphonchaikul in Bangkok, who had planned to use the funds to buy a washing machine. "I don't think they'll do it again. The economy is bad." The Pheu Thai party's failure to fully implement the scheme had damaged its credibility, said political analyst Sukhum Nuansakul. "The digital wallet project hasn't worked," he added. "People hoped they would get it and they waited for it, but didn't get it." The remaining 16 million people registered for handouts should be notified, said Thirachai Phuvanatnaranubala, deputy leader of the opposition Palang Pracharath Party. "The government should tell the truth to these people that it actually won't be able to continue the programme due to budget and technical problems," he said in a statement. Three months after its launch, the stimulus plan had been unable to boost consumption, mainly because the handouts were sometimes used to pay down debt, central bank Governor Sethaput Suthiwartnarueput told Reuters this year. Thailand's household debt is among Asia's highest, at 88.4% of gross domestic product. On the campaign trail, the party floated the scheme as a multibillion-dollar initiative to kick-start Thailand's pandemic-hit economy and reach annual growth of about 5%. Yet, the $550-billion economy expanded by just 2.5% last year, lagging regional peers, and this year looks even worse. Since launching the scheme last September, after numerous adjustments and delays, the government has distributed just over a third of the earmarked 450 billion baht ($14 billion). The first tranche of 144.5 billion baht in September went to welfare cardholders and people with disabilities, with a second phase of 29.9 billion baht delivered to senior citizens in late January. The 157 billion baht meant for the scheme's next stages will now go to fund projects to help the economy cope with the impact of proposed U.S. tariffs, on advice from the central bank and a state planning agency. "Both of them asked us to reconsider, to see if this money can be used for something more urgent and necessary than the digital money handout," Paetongtarn said when announcing the delay. Thailand faces a U.S. tariff of 36% if it cannot negotiate a reduction before expiry of a July deadline, until which a rate of 10% prevails. Last month the state planner shaved its economic growth forecast for this year by one percentage point, to a range of 1.3% to 2.3%, warning that the tariff impact would last for two years. The government's mismanaged policies are reflected in GDP growth of just 2% in 2023 and 2.5% in 2024, said Prakit Siriwattanaket, managing director of Merchant Partners Asset Management. "The downside of the digital wallet is that it didn't stimulate the economy as they thought," he said. "It's an extremely wasteful handout." ($1=32.55 baht)
The Independent
4 hours ago
- The Independent
Elon Musk caps off DOGE exit by leaving Trump and Johnson unpleasant parting gift
Elon Musk departed Washington this week, bringing one of the weirdest sagas in the history of the presidency to a close. Not everyone leaves DC with their reputation intact. But most people manage to get through it without their bladder control abilities making it into a New York Times exposé. So ends the Elon show. On Sunday, Washington saw its last gasp — a final, awkward sitdown between Musk and CBS Sunday Morning. Despite an awkward attempt by Musk to change the terms of the interview last-minute and bar any mention of politics, he answered questions about the end of DOGE and the budget reconciliation plan endorsed by Donald Trump, Speaker Mike Johnson and the majority of House Republicans. In his interview, Musk made it clear he hadn't gotten the memo that Johnson and other Republicans want their caucus to lie about the Congressional Budget Office (CBO) score, which the speaker and others are now unconvincingly pretending is a group of liberal activists. Meanwhile, conservatives in their own caucus — the same deficit hawks who held Johnson to cuts of nearly $1 trillion affecting Medicaid — continue to cite the CBO's methodology as they hammer Johnson and their colleagues for insufficient deficit spending cuts. Musk's comments on that budget bill, released in the lead-up to CBS's interview last week, set off a firestorm in Washington. There was an obvious reason: Musk, in one fell swoop, undermined the entirety of the budget plan and essentially made Johnson out to be a liar — if you believe Musk, who no longer has a reason to play nice in Washington. "I was, like, disappointed to see the massive spending bill, frankly, which increases the budget deficit, doesn't decrease it, and undermines the work that the DOGE team is doing,' Musk told CBS News. Musk's demeanor was similar to the eyebrow-raising performance he delivered during his final press conference this week with Donald Trump — when he seemed visibly distracted by the gold ornamentation of the room and stood in a decidedly odd manner next to the (literally) sitting president of the United States. "I think a bill can be big or it can be beautiful," he went on. "But I don't know if it could be both. My personal opinion." Oops. With that quote, Musk did damage that was still being felt on Sunday, when the rest of his interview aired. At practically the same moment that his comments were re-broadcast, Speaker Mike Johnson was facing an uncomfortable grilling from NBC's Meet the Press about the bill and whether it cut the deficit significantly, or even at all. "I sent my good friend Elon a long text message explaining it can be big and beautiful," Johnson claimed. He repeated his insistence that the bill is 'not going to add to the debt' during his own interview, despite the CBO's outlook. Certainly, the guy who brought the motto 'move fast and break things' to Washington is going to read that text. Regardless of how that particular conversation turns out, the damage is done. Johnson's problem is simple: his own caucus does not believe his insistence about the 'big, beautiful bill' being deficit-neutral. Why should anyone else? Johnson wishes it were as simple as convincing Americans (and the media) that Democrats are the only ones opposed to his deficit math. In reality, some of the staunchest debt hawks in Washington — all conservatives — are in the same camp. If one needs proof, they can simply ask Chip Roy, one of the leaders of those debt hawks. Roy, in his final statement about the bill's passage in May, explained that he voted for the bill to achieve deficit cuts — but even he lamented that the bill did not go further in that regard. 'The good news is that the bill technically held true to that framework by yielding modest deficit reduction over a 10-year budget window,' said Roy. 'Importantly, it does this by cutting spending $1.5 trillion over 10 years, reforming programs like Medicaid and SNAP with work requirements.' It should be obvious, but just to be clear: 'modest deficit reduction' does not equal a budget that is deficit-neutral. The 'one big, beautiful bill' is still projected to add nearly $4 trillion to the deficit after those cuts, according to the CBO and other analysts. This offhand comment from Musk won't make his life any harder. He returns to Tesla, now bearing the brunt of a stunning drop in profits tied directly to his political activism. By doing so, he exits an unfamiliar arena: Washington, a place where public perception matters and can change on a dime. It will, however, make things a lot harder for Johnson and Senate Republican leadership, the latter of whom will now oversee the bill's fate for the next month. Already, Republicans are talking about changing the bill — including, potentially, by splitting 'one' big beautiful bill into several. Those Senate Republicans only acquired more ammunition to defy the White House and Johnson on Sunday. One of those Republicans is Ron Johnson, who, like his conservative allies in the House, has been one of the most vocal deficit spending watchdogs in Congress. Even before Musk's latest comments, Johnson was publicly prepared to buck the White House over the bill's price tag. After Sunday, the combination of the Musk interview and the Senate's hair-thin margin may give him all the political cover he needs. 'Republican leaders repeatedly say, 'We don't have a revenue problem, we have a spending problem,'' Johnson tweeted before the bill passed the House. 'Right now, it doesn't appear that they are willing to fix it.' 'I am going to insist that we do,' he warned.
The Guardian
9 hours ago
- The Guardian
Is the cost-of-living crisis over? Victoria's new treasurer is optimistic, but housing remains a battleground
Victoria's new treasurer, Jaclyn Symes, is confident cost-of-living pressures will ease by the next election – and that voters will be less concerned about the state's soaring debt once they see the completed projects it has helped fund. In an exclusive interview with Guardian Australia after handing down her first budget in May, Symes also signalled openness to reforming stamp duty. But she hit back at industry groups like the Property Council, calling on them to move beyond criticising current policies and offer solutions: 'Saying, 'Don't do this,' that doesn't particularly help me. I have a policy brain, I like to find problems and fix them.' The upper house leader made history in becoming Victoria's first female treasurer after she was handpicked by the premier, Jacinta Allan, to take over from retiring Tim Pallas in December. Symes inherited a mountain of debt, and the recent budget forecasts it to climb even higher, to $194bn in 2028-29. That's up from just $21.8bn before Labor took office in 2014, after years of rapid public sector growth, major infrastructure spending, the pandemic and subsequent credit rating downgrades. Symes's first budget was sold as a turning point, delivering a $600m operating surplus and a slight drop in net debt relative to the state's economy. It also included unexpected federal windfalls, which Symes defended using to ease cost-of-living pressures – pointing to $18m for food relief as one of her proudest budget items. 'People have asked, 'Couldn't you have had a higher surplus?' Sure. But it wouldn't have felt very good knowing we're not supporting some of those services that people doing it really tough are relying on,' Symes says. Looking ahead to 2026 – the year of the next state election – Symes is optimistic that the cost-of-living crisis that has engulfed Australia will have eased. She says interest rates are coming down, housing supply is growing and, for the first time in years, wages are forecast to outpace inflation. Sign up for Guardian Australia's breaking news email 'All the signs are there. But if we go too early and abandon the people that are still struggling, then I wouldn't feel very proud about that,' she says. She hopes that people will soon be 'feeling more confident and not worrying about the cost of every meal that's going on the table'. 'That's what you want for all Victorians, but that's not the case right now'. Symes also believes that state debt won't dominate the election debate, and that voters will instead be grateful for the infrastructure it's funded, including the Metro Tunnel and West Gate Tunnel, both set to open this year after huge cost overruns. Symes points to Sydney's $21.6bn Metro, which also ran billions over budget but is now popular with voters: 'The day it opened, people were like, 'Oh, actually, this is a worthwhile investment.'' The budget also brought pain for some, with 1,200 public sector jobs set to go, with the treasurer warning more job losses are likely once the government receives the recommendations of a review, a move Symes defends as tough but necessary. 'Do I want people to lose their jobs? No. But I also have a responsibility as treasurer to make sure that we are being cost-effective,' she says. Sign up to Breaking News Australia Get the most important news as it breaks after newsletter promotion At parliament last week, it became clear housing will be a key battleground at the next election. While the premier pledged to get 'millennials into homes' through planning reform and an extension of stamp duty concessions for new apartments, units and townhouses, the opposition announced a revived 2022 policy to abolish stamp duty for first home buyers on properties worth up to $1m. The shadow treasurer, James Newbury, says it would give 'young Victorians the final leg up they need', but Symes is sceptical, questioning both the opposition's costings and the policy's failure to increase housing supply. Stamp duty remains a huge revenue source for the state – forecast to bring in $11bn in 2028-29. But it's loathed by homebuyers and economists. The Grattan Institute's Brendan Coates calls it 'the worst tax in Australia', as it locks people into their homes, discourages downsizing and acts as a 'tax on divorce' – as separating couples will both have to go on to pay it. Many economists have long called for it to be replaced with a broad-based land tax. Asked if she would consider such a move, Symes leaves the door open: 'I'm always open to having discussions about tax reform. I've got the finances to manage so I can't make reckless announcements.' Last week, Symes addressed a post-budget Property Council breakfast, where she faced a tough crowd. Before she took the stage, Lendlease's Adam Williams warned that property taxes would soon make up 47% of the state's total tax revenue. In the Q&A segment, a member of the crowd said tax on foreign investment was 'killing' developers. Symes tried a joke: 'Let's have a show of hands – what's the worst tax? What's your favourite tax?' It fell flat. Newbury called her 'tone deaf' and 'out of touch' and criticised her for previously describing the role of treasurer as 'fun'. But Symes says she's not fazed by criticism, and that she's been underestimated before: told she couldn't be agriculture minister because she wore wedges to a farm and dismissed as attorney general for 'giggling like a schoolgirl'. 'The commentary that actually affects me more than anything else is the young women, particularly high school girls, who say, 'We have a female treasurer. That's so cool.''
