Thailand announces stimulus package aimed at helping the poor

Jul 15, 2008, 8:01 GMT

Bangkok - The Thai government on Tuesday announced an economic stimulus package amounting to an estimated 1.4 billion dollars in reduced fuel taxes, slashed utility bills and free transport for the poor.

Prime Minister Samak Sundaravej announced six measures aimed at cutting costs for the poor including reduced excise taxes on diesel and bio-diesel fuels, a price freeze on liquified petroleum gas (LPG) for household use, slashed water and electricity utility bills for households using minimal amounts, free transport on 800 buses servicing Bangkok and free tickets on third-class seats in the government-owned train service nationwide.

Samak said the measures, which will go into effect on August 1 and last for six months, would cost the government 46 billion baht (1.37 billion dollars) in lost revenues. The tax cuts on diesel and bio-diesel will start on July 25.

As a result of skyrocketing world oil prices and food costs, Thailand's inflation hit 8.9 per cent year-on-year in May and could reach double digits this year.

Samak said the stimulus measures were all in keeping with Thai laws and regulations and would not be withdrawn, despite growing attacks on his government.

Samak's six-month-old cabinet has been the target of a plethora of protests and court cases that has already cost him three ministers, including former foreign minister Noppadon Pattama, who was forced to resign last week after he was charged with violating the constitution for signing an agreement with Cambodia to support its listing of a Hindu temple on the Thai border as a World Heritage Site without first receiving parliament approval.

'The foreign minister has already committed (political) suicide and now people still want to put his body in jail,' joked Samak, in reference to efforts by anti-government groups to impeach Noppadon and press further charges that might send him to jail.

Samak used the announcement of the stimulus package to criticize the flurry of protests, censure motions and court cases for stymying the activities of his government.

The 73-year-old prime minister faces several court cases himself, including the outcome of an appeal in a libel case that could see him jailed if he loses the case.

Samak is the nominal head of the People Power Party (PPP), which won the December 23 general election on a populist platform that mimicked the policies of the defunct Thai Rak Thai Party that ran Thailand during 2001 to 2006 under the premiership of Thaksin Shinawatra.

Thaksin, a billionaire businessman who was toppled by a coup on September 19, 2006, is widely believed to be the real power behind the PPP.