Bangkok: Veerayuth Kanchuchat, a Member of Parliament and deputy leader of the People's Party, has voiced strong criticism against the Thai government's 2027 Annual Budget Act, highlighting its failure to support the country's automotive industry. He expressed concerns about the budget allocation, stating that the government's focus on foreign investment has led to the neglect of the domestic auto sector, which is a significant contributor to Thailand's GDP and employs over 600,000 people.
According to Thai News Agency, Mr. Veerayuth argued that the government's aim to transform Thailand into a high-income nation requires an annual economic growth of 5.8%. However, growth has been lackluster, with projections showing only 2.5% in late 2025 and 2.8% in early 2026. He compared Thailand's stagnant progress to South Korea's consistent development, emphasizing that Thailand has been stuck in the middle-income trap for five decades.
Mr. Veerayuth criticized the government's approach to the automotive industry, pointing out the disproportionate budget allocation towards subsidizing car manufacturers instead of investing in human resources and industry growth. He highlighted the failure of the EV3.5 policy, which has seen significant subsidies to electric vehicle manufacturers with little return on investment. The production numbers have fallen short, with only 31,000 vehicles produced by mid-2026 against a target of 240,000, while companies like Neta have ceased production, leaving thousands of vehicles unfinished.
He noted that almost 90% of the budget is spent on subsidies, leaving minimal funds for infrastructure and skills development. For 2027, only 68 million baht has been allocated for workforce skills development, a stark contrast to the billions spent on subsidies. The reduction in the skills development budget for the Ministry of Labour and the limited training capacity of the Department of Industrial Promotion reflect broader issues of misaligned budget priorities.
Mr. Veerayuth underscored the chaos in budget allocation, attributing it to inconsistent manpower targets and a lack of strategic, agenda-oriented management. He criticized the political focus on ministerial quotas over expertise, leading to ineffective policy decisions.
In response, Mr. Veerayuth proposed four measures to revitalize the automotive industry. These include transforming the EV board to a comprehensive 'future vehicle board,' shifting budget focus from demand subsidies to supply investment, assisting parts manufacturers in transitioning to new industries, and implementing stricter tax and local content criteria to ensure genuine foreign investment linkage with Thai businesses.
He concluded by stressing that Thailand's challenge is not the lack of investment but the absence of a long-term strategy, warning that ongoing subsidies without building domestic competitiveness could lead to the loss of both existing and potential industries.