May 2009 : Court declares 4000 billion loan constitutional Court declares 4000 billion loan constitutional Q1 deficit 7.1% Official foreign travel banned in favour domestic Petroleum and cigarettes taxes to increase Bus project again deferred Criminal limitation extended Court declared Somchai disappeared person How to resolve community radio problems? Social security contributions reduced Swap educational loan for 20,000 students Restrict adverts for alcohol Court declares 4000 billion loan constitutional On 3rd July, the Constitutional Court unanimously decided that the executive decree authorizing the Ministry of Finance to raise a loan of 4000 million baht to revitalize the economy is not unconstitutional. It complies with Article 184 of the Constitution. The case was submitted to the Court by the Opposition Party on grounds that Article 184 requires an executive decree be used in case emergencies only. The Court found that the decree was for the purpose of the country’s economic security and to alleviate the economic crisis. Moreover, the matter was an emergency. Government and Opposition representatives testified before the Court on 26th May and the decision was announced on 3rd July. Q1 deficit 7.1% On 25th May, the National Economic and Social Development Board (NESDB) announced that National Gross Domestic Product (GDP) in the first quarter of 2009 was -7.1%, continuing from -4.2% in the last quarter of 2008. It is anticipating that the annual GDP for 2009 will be between -2.5% to -3.5%, most likely -3 %. Official foreign travel banned in favor domestic The Cabinet on 19th May approved an amendment to the travel budget of 15 ministries, as proposed by the NESDB. Foreign trips are to be changed domestic, resulting in a saving of 173.90 million baht, or 13% of the total annual travel budget of 1,331.84 million baht allocated for study tours, trainings and seminars. The Prime Minister requested all officials tours to be made within the country in order to boost the ailing economy. He particularly asked the Interior Ministry to ensure that local administration organizations reduce their foreign travel. Petroleum and cigarettes taxes to increase The Excise Tax Ordinance on petroleum and cigarettes, effective 14th May, lifted the tax ceiling on petroleum from 5 to 10 baht and on cigarette up to 90 percent of its selling price. However, these new maxima will not be collected immediately, it is anticipated that benzene 91 and 95 will be taxed from 5 to 7 baht per liter and cigarette from 80 to 85 percent. It is estimated that these new taxes will increase state revenue by 750 billion baht annually. Bus project again deferred The Cabinet, on 19th May, deferred the leasing of 4,000 NGV buses, proposed by the Ministry of Transport, and asked the Ministry to coordinate with the Budget Bureau and Ministry of Finance in re-submitting the proposal within 2 weeks. The project was first submitted to the Cabinet under the Samak Government on 22nd July 2008. In addition to the leasing of the buses, it also aimed to improve the management of Bangkok Mass Transit Authority (BMTA). The Cabinet, then, reduced the number of vehicles, from 6,000 to 4,000. The project was resubmitted to the current government at a similar cost of 4,780 baht per vehicle per day, with total project cost reduced to 69,788 million baht based on: A lease fee of 2,195 baht per vehicle per day, equivalent to 32,047 million baht throughout the project. A maintenance fee of 2,250 baht per vehicle per day, equivalent to 32,850 million baht throughout the project. An electronic fee of 157 baht per vehicle per day, equivalent to 2,292 million baht throughout the project. An insurance fee of 31 baht per vehicle per day, equivalent to 453 million baht throughout the project. A management fee of 139 baht per vehicle per day, equivalent to 2,029 million baht throughout the project. The Cabinet, however, approved the plan to improve BMTA management in terms of restructuring, re-financing and reducing the number of employees. Criminal limitation extended On 26th May, the Cabinet approved, in principle, a proposal to amend criminal law on two issues: To extend the time for which victims could file suit, from 3 to 6 months, starting from the date the victim knew of the offence or of the offender. In case of a decision by the final court, to abolish limitation when the offender could be brought back to serve the sentence, if he had fled from justice. Court declared Somchai disappeared person On 18th May, the Civil Court declared Somchai Neelapaichit a legally “disappeared” person, since he had not been seen for five years. Somchai, former President of the Muslim Lawyers Association, had filed suits on behalf of victims abused by state officials particularly southern Muslims charged with terrorism in connection with the Mujahidin. He was last seen on 13th March 2004, his wife, Angsana, petitioned the Court for the declaration in order to settle his estate. How to resolve community radio problems? On 7th May, the Association of Community Radios organized a seminar, in cooperation with the Mahanakorn Technology University and the Foundation of Volunteers, on the management of community radios. The seminar was based on a study on a similar topic which disclosed reasons for the inability of community radios to serve their communities: lack of regulations over air-time commercials and the competition over frequencies among stations. Six resolutions were proposed: Amend air-time regulations to ban all advertising which is currently allowed. Give licenses to community radio broadcasters for only one year. In the meantime, conduct a study to determine how the civil society can participate in the management of community radio stations. Strictly enforce laws which allocate 20 percent of the frequencies to community radio. Set up an independent committee to administer community radio management. Provide community radio broadcasters with technology and know-how. Allow free-and-fair competition amongst commercial radio stations. Social security contributions reduced The Cabinet on 6th May approved reduced contributions into social security funds, as proposed by the Ministry of Labor, as follows: A reduction from 5 to 3 percent contribution, by both employers and employees, but maintain the 2.75 percent contribution by the state. A reduction from 1.5 to 0.5 percent contribution, for sickness, disability, death and pregnancy, but maintain the level of unemployment contribution. A reduction from 3 to 2 percent of the salary for pension contributions, by both employers and employees, but maintain the level of unemployment benefit. These new rates will be effective form the date announced in ministerial regulations until 31st December 2009; thereafter current rates will apply. For 579,235 insured persons, monthly contributions into social security funds will be reduced by 192 baht per person. Swap educational loan for 20,000 students On 13th May, the Cabinet extended Educational Fund I to 20,000 1st year students until their graduation. The budget for this will be transferred from the 7,000 million budget of Educational Fund II, on condition that no further funding will be required. Educational Fund II was established in 1995 under the Educational Fund Act, with the aim to provide loans to students in schools and universities. Fund II has different loan criteria including a wider range of applicants and academic subjects than Fund I, so it was used by more students. However, it lacked conditions on family income and priority subjects, (those which are needed or in short supply). The Act is therefore, being amended, but the amendment disrupts the granting process for the 2009 academic year. The Cabinet therefore, had to extend the Fund I on a temporary basis. Restrict adverts for alcohol On 26th May, the Cabinet approved, in principle, a draft ministerial regulation proposed by the Public Health Ministry to restrict alcohol advertisements. The regulations will: Prohibit alcohol advertisement, which has persuasive or descriptive content, allowing those having socially creative or informative content. Prohibit alcoholic product images, excluding product logos, the latter can appear for no longer than 2 seconds on TV and no more than 5 percent of the total advertised area in publications. Limit alcohol advertising time, on television, to between 22.00 and 05.00 hrs.