Thailand
Thailand: Private sector deems latest relief measures insufficient
The cabinet resolution on relief measures, including new subsidies for power and water bills set to take effect next month, is necessary but insufficient to help businesses cope with the new outbreak of Covid-19 that is crippling the economy, say business leaders.
Households and small businesses are the main beneficiaries of the two-month financial aid, including a 10% discount on water bills. The government also promised to seek cooperation from internet service providers to reduce monthly service fees, deal with debt burdens for entrepreneurs and consider giving individual informal workers and farmers a monthly 3,500-baht handout for two months. The handout is scheduled for discussion at a cabinet meeting next Tuesday.
RIGHT MOVE
The Thai Chamber of Commerce (TCC) and the Federation of Thai Industries (FTI) welcomed the new relief package, saying it is a start in providing help.
“The FTI agrees with the cabinet’s approval as some measures are similar to those proposed by the Joint Standing Committee on Commerce, Industry and Banking [JSCCIB],” FTI vice-chairman Kriangkrai Tiannukul said.
TCC chairman Kalin Sarasin said he wants to see more aid packages, including helping the hardest-hit hotels retain their employees and increasing the 3,500-baht subsidy in the co-payment scheme to 5,000 baht to stimulate spending.
INSUFFICIENT EFFORT
Marisa Sukosol Nunbhakdi, president of the Thai Hotels Association, said the new relief measures are not enough to save tourism operators from hardship as the recent outbreak aggravated a situation that was already critical last year.
For instance, the electricity bill reduction should last for six months to help hoteliers, rather than just two months, she said.
A proposal from the private sector — a 50% co-payment scheme for monthly salaries — which wasn’t approved on Tuesday is the most urgent need for the hospitality sector, said Mrs Marisa.
“The government is the only one who can lend a hand and help us protect jobs at this moment,” she said. “The association will continue to push for the co-payment scheme.”
Mrs Marisa said the industry risks losing experienced labour because a whole generation of staff who worked for 20-30 years will be wiped out if hotels cannot keep them on the payroll.
When business revives, hoteliers will have to train new staff, which may not deliver such high-quality service to guests as veteran workers, she said.
Mrs Marisa said effective financial measures would prevent hoteliers from selling their properties to local billionaires or foreign investors.
LITTLE FOR E-COMMERCE
Pawoot Pongvitayapanu, chief executive of e-commerce website Tarad.com, said the government’s fresh stimulus measure of a 3,500-baht monthly handout for two months could result in a little spending via e-commerce platforms, such as JD Central, Shopee and Lazada, as this programme targets freelancers.
The measure would likely lead to low-income people spending more on food, drink and groceries at local shops, helping local food vendors, he said.
LOOKING FORWARD
Rvisra Chirathivat, customer director at Central Department Store Ltd and Robinson Plc under Central Retail, said the new packages should stimulate the economy to a similar level as happened last year, with the “Shop Dee Mee Khuen” tax rebate scheme that ran from Oct 23 to Dec 31, 2020.
“At Central and Robinson Department Stores, we saw a highly engaged level for the previous stimulus programme,” she said.
“We are ready to support the government campaigns and expect to see continued stimulus measures because we rely on local consumption and it will take time for foreign tourists to return to Thailand.”
Somchai Pornrattanacharoen, president of the Thai Wholesale and Retail Trade Association, said he is satisfied with the new stimulus package, but the government should offer those affected by rules in red zone provinces other measures such as soft loans.
He suggested the measures may vary, depending on the level of impact in each zone. For the most affected locations such as Pattaya, financial institutions should suspend interest payments from the date they closed following local rules.
In addition to water and electricity bills, transport fares should be cut to minimise consumers’ burdens, said Mr Somchai. The money they save will eventually add to their purchasing power, he said.
PROMPT PAYMENTS
Win Phromphaet, chief investment officer at Principal Asset Management, said the most important concerns for Thai capital markets are the speed of the tourism recovery based on controlling the outbreak, and businesses’ ability to maintain operations and support workers until the economy recovers.
Mr Win said 3,500 baht in direct payments to those struggling could help extend much-needed relief for workers, while earlier measures that stimulated consumptions should be continued.
However, measures to stimulate a large volume of consumption such as the Taste, Shop, Spend scheme do not seem to be effective because household debt is so high, and many recipients of government aid may use the money to pay off these debts, he said.
The new relief measures should benefit retail and consumer goods stocks as they will allow consumers to increase their goods spending, according to Asia Plus Securities (ASPS).
Terdsak Taweethiratham, vice-president of ASPS, said the government is limiting the budget for the relief package, in effect restricting access for such assistance to specific groups, meaning not all demographic groups will be covered as in the past.
He expects the measures should help people in need, although the stimulus offers a limited budget and shorter period of assistance than previous efforts despite a more widespread outbreak.
“It is better than nothing,” said Mr Terdsak.
The measures are expected to benefit retail and consumer goods stocks such as CPALL and Berli Jucker (BJC), according to ASPS.
Source: https://www.bangkokpost.com/business/2049967/private-sector-deems-latest-relief-measures-insufficient