The scheme is backed by the Prime Minister Prayut Chan ocha who has expressed concern for 11 million workers, many working in hotels in the foreign tourism sector, who have been left out of all government support efforts to date and who are suffering from reduced working hours, pay cuts and even suspensions of their work for periods of time.
A reported initiative is being pursued by Minister of Labour Suchart Chomklin with the support of the Prime Minister, to negotiate a ฿4,000 per head payment to all salaried workers in Thailand. The matter is currently being discussed with the Finance Ministry and may be put before the cabinet on Tuesday next.
Thailand’s Minister of Labour, Suchart Chomklin, fresh from a cabinet decision this week to assist firms paying into the social security fund with reduced payments for February and March is now reported to be behind a scheme to pay out ฿4,000, in a once-off payment, to employees in the kingdom registered under the Social Security system.
The government has been pursuing targeted efforts to assist those most vulnerable who are impacted by economic hardship caused by the Covid-19 virus outbreak in Thailand. It’s response, so far, has been to assist those impacted who are on social welfare or the self-employed within Thailand’s grey economy and farming.
No scheme has been initiated since the Covid-19 crisis erupted, aimed at benefitting private-sector employees under the 1990 Social Security fund
The economic impact of this second wave of the crisis has been made worse by the absence of foreign tourism income, at this time of year, traditionally a time when foreign tourists boost the country’s economy.
In the last week, Thailand’s economic planners appeared to have acknowledged this.
However, since the crisis began last year, no scheme has been put in place to assist employees paying social security under Section 33 of the 1990 Social Security Act.
The Minister of Labour has pointed out that this encompasses over 11 million workers, many of whom work in the foreign tourism sector and other industries affected by the emergency.
Many are hotel workers suffering reduced hours, periods when no work is available as well as pay cuts
Indeed, studies by Thai economic policy agencies such as the National Economic and Social Development Council, have shown that much of the economic downturn last year was absorbed by such workers who are often suspended, furloughed from work or put on new shifts with reduced hours or even pay cuts.
This is how private firms have been coping with the crisis.
It is particularly so with tourism industry workers with many hotels, throughout the kingdom, now barely ticking over often with no guests at all.
Push is the brainchild of PM Prayut Chan ocha
Minister Suchart, on Thursday, said the scheme being pursued was the brainchild of the Prime Minister, Prayut Chan ocha, who has expressed concern for this group representing the backbone of the economy.
‘Everyone is feeling the effect of the crisis. The Labour Ministry understands this and is trying to help the workforce in the social security system,’ he said.
He revealed that the National Economic and Social Development Council (NESDC) would be asked for advice on how the scheme should be handled.
In discussions with the Finance Ministry
Minister Suchart, at the behest of the PM, is in talks with the Finance Ministry on the scheme while Fiscal Policy Office Acting Chief, Kulaya Tantitemit, has acknowledged the discussions.
The estimated cost of the scheme will be ฿40 billion and it is anticipated that this will come from a ฿390 billion fund earmarked from a ฿1 trillion loan arranged by the government last year to deal with the economic effects of the pandemic and rehabilitation of key sectors.
Fiscal Policy Office Acting Chief, Kulaya Tantitemit, says talks are taking place at the highest level
Ms Kulaya said that talks on the proposal are being pursued at the highest level and that the issue will be discussed by the cabinet on Tuesday.
She pointed out that some Section 33 employees have already benefited as they are in receipt of social welfare cards and this may be taken into consideration when formulating the proposal. It is estimated that this accounts for only 10% of private-sector workers registered under the system.
Foreign workers to be excluded from the plan
It is also understood that the benefits package for social security fund workers will exclude foreigners who participate in the scheme as well as anyone with a bank current account balance over ฿500,000.
Social security fund shortfall now plugged
The Minister of Labour, Mr Suchart, said that he wants to see the initiative ironed out with Finance this week. The government pays 2.75% into the social security fund while both employers and employees contribute 5% each.
A report by the Fiscal Policy Office, in a risk assessment for 2019, revealed that the government had delayed the payment of approximately ฿96.4 billion into the fund.
On Thursday, Minster Suchart referred to this and confirmed that the fund has received a substantial injection of funds recently from the government to rectify matters and boost its liquidity. He attributed the situation to the failure of a previous ministry.
Cautious reaction from labour and unions
Reaction to the plan has been one of muted caution from labour groups and unions who are waiting to see the scheme confirmed by the government and implemented.
The proposed payment is less than half the minimum salary for one month.
Nonetheless, workers, while they are grateful at the prospect of this once of payment as well as concessions on utility bill payments over the coming months, are still left to make ends meet in a highly uncertain environment that 2021 has ushered in.
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Further reading:
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Finance Minister says economy must pivot away from tourism with a switch to S-Curve industries
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