The National Anti-Corruption Commission (NACC) has dealt a severe blow to Prime Minister Srettha Thavisin’s Digital Wallet initiative, warning of potential legal violations related to election laws and financial discipline. 

A panel formed by the National Anti-Corruption Commission (NACC) on Tuesday effectively sounded the death knell for Prime Minister Srettha Thavisin’s Digital Wallet initiative. In short, MPs and politicians were put on notice that proceeding with the plan risked breaking the law relating to elections and the country’s 2018 State Fiscal and Financial Disciplines Act. Any effort to now push this unpopular proposal through, at this point, will inevitably spell disaster for the government, its ministers and even MPs.

Deputy Prime Minister Anutin Charnvirakul, on Tuesday, postponed a policy committee meeting at Government House. It had been due to discuss the Digital Wallet plan when news of the pending announcement from the National Anti-Corruption Commission (NACC) was received. Mr Anutin indicated the matter will be discussed at length by the cabinet.

As Prime Minister Srettha Thavisin courts international investment at the Davos World Economic Forum in Switzerland, the political temperature in Bangkok has been heating up.

A move by senators to grill the government coincides with the budget debate in parliament. The coalition government, with 314 MPs at its beck and call, has not been overly concerned

However, on Tuesday the National Anti-Corruption Commission (NACC) dropped a clanger on PM Srettha’s agenda.

NACC spelt out the danger on Tuesday, a week after the Council of State made it clear the proposal was skating on thin ice legally. Real political danger if it progresses

The NACC sounded more than a cautionary note on the proposed ฿10,000 digital wallet handout.

In brief, it raised concerns about potential legal breaches related to election laws and financial discipline.

In particular, the anti-corruption agency cited the 2018 State Fiscal and Financial Disciplines Act.

The report comes after the Council of State also poured cold water on the plan the week previously. Before this, political pundits have warned that any attempt to stubbornly force through the proposal will collapse the government.

Before the warning, a key government committee postponed its scheduled meeting on the matter as it awaited the NACC’s opinion.

That decision was taken by Deputy Prime Minister Anutin Charnvirakul who is its Vice Chairman. The meeting had been previously scheduled for Tuesday at Government House.

After that, the report from the NACC took issue with disparities between the promises made by the ruling Pheu Thai Party during the election campaign and the actual details of the scheme that were eventually ironed out by the government.

Report identified a stark difference between the plan before the election and after it in terms of both funding and the benefits dispersed to the public

At first, Pheu Thai pledged a ฿10,000 payout to every Thai citizen aged 16 and above. This came to 56 million people. However, the government later introduced additional conditions, reducing the number of eligible recipients to 50 million.

The financing strategy for the scheme has also undergone a shift. Previously, Pheu Thai initially proposed funding from the national budget. After that, the government planned to secure ฿500 billion in loans for the project. 

A darkening financial environment with less financial liquidity in the economy in 2024 has made this even more controversial.

At the same time, the government’s finances are being closely watched by rating agencies in relation to its borrowing requirements.

The NACC, on Tuesday, voiced concern that these changes might constitute a violation of election laws. Additionally, it raised the prospect of potential penalties for MPs found guilty of such offences.

In effect, the whole Digital Wallet scheme has just been red-lighted and become a dangerous political minefield.

Key panel figure was a player in reviewing the disastrous Rice Pledging scheme by the government of Yingluck Shinawatra. A debacle that cost at least ฿500 billion

Commissioner Supa Piyajitti, a key player in previous probes, notably the infamous Rice Pledging scheme, heads the NACC panel.

The Rice Pledging scheme was nothing short of a debacle when forced through by the previous Pheu Thai government.

Yingluck fled Thailand, skipping bail in August 2017, before being convicted of negligence over rice scheme

That scheme, introduced after Pheu Thai’s landslide win in 2011, guaranteed prices for farmers. Huge amounts of rice went unsold with the government left with a loss of at least ฿500 billion.

In short, this figure only relates to the rice left unsold. It did not include the subsidies also paid for by the government on rice actually sold.

Later, former Prime Minister Yingluck Shinawatra was sentenced to 5 years in prison for negligence. Afterwards, a ฿35.7 billion compensation order raised by the Ministry of Finance against her was reversed by the Administrative Court.

The National Anti-Corruption Commission (NACC) panel on the Digital Wallet was formed in October 2023. In short, it was tasked with scrutinising Pheu Thai’s signature policy.

Measured response on Tuesday from Deputy Prime Minister Anutin Charnvirakul, also interpreted as a shot across the bows in relation to the Digital Wallet

The NACC has also raised the possibility that the scheme could violate the 2018 State Fiscal and Financial Discipline Act. This is because there is no apparent economic crisis necessitating such an urgent intervention or loan facility.

Before the NACC’s bombshell, Deputy Prime Minister Anutin Charnvirakul emphasised the need for caution, stating: ‘We have a Cabinet of 36 people who believe that we will work carefully and within the provisions of the law as much as possible.’

While calming the waters, it is also a shot across PM Srettha’s bows.

The Digital Wallet is dead in the water. Any attempt to pursue it, at this time, will be political suicide.

Anutin also addressed potential motions of no-confidence brewing in parliament. The deputy PM asserted that the government is ready to explain any suspicions or criticisms. However, he said that must come after the consideration of the 2024 budget.

In addressing allegations of pressure being brought to bear on senators to prevent a general debate, Anutin denied any involvement. The leader of the Bhumjaithai Party currently serves as Minister of the Interior. 

Addressing reports of political pressure he was adamant. ‘No, it’s from other people, I don’t know. But my party definitely is not part of it,’ he declared.

Pushing forward with the Digital Wallet at this time would be political suicide. If the PM and the Pheu Thai Party insist, they are walking into a trap

As scrutiny intensifies, the NACC’s recommendations underscore the need for the government to thoroughly review the digital wallet scheme. Certainly to ensure compliance with legal frameworks, now looks impossible and politically too dangerous.

Significantly, the potential prospect of legal violations, coupled with claims of possible corruption, pose an insurmountable hurdle to the plan.

In effect, any attempt to persist in implementing this plan would be walking into a trap. Certainly, given the advice of the Council of State and the National Anti-Corruption Commission (NACC), it would be political suicide.

Digital Wallet plan could break up the government before it launches says top Thai political pundit
Rejected ฿10k digital wallet plan ditched by Pheu Thai with moves towards a social welfare state

Indeed, the proposal when first unveiled to the public last year coincided with a drop in support for Pheu Thai. It was not widely supported with voters on May 14th 2023 plumping instead for real and permanent structural reform in Thailand. 

In effect, this was the platform of the Move Forward Party which won the poll.

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