Thailand’s Growing Elderly Population Strains Social-Welfare Budget
The Fiscal Policy Office anticipates that, by 2033, Thailand’s social-welfare expenditures will surpass 1 trillion baht, primarily due to the increasing expenses associated with caring for the nation’s aging population.
A Dwindling Workforce and Higher Expenditures
As the number of elderly individuals grows, the government is compelled to allocate more funds towards their care, while tax revenue from the shrinking working-age population is declining. According to Finance Ministry deputy spokesperson Pornchai Thiraveja, the birth rate in Thailand has been decreasing since 2013. This trend not only slows economic growth but also diminishes the state’s taxable revenue, explained Pornchai, who also serves as an advisor to the ministry’s Fiscal Policy Office.
Over the last five years, the state’s cost of caring for the elderly (inclusive of pensions, senior healthcare, and other welfare benefits) has increased by 5.15%, stated Pornchai. He emphasized the need for the government to address the impending imbalance between expenditures and tax revenue due to the rising cost of elderly care.
Surge in Social-Welfare Projects
Pornchai noted that the budget for social-welfare projects had risen from 509 billion baht in fiscal 2018 to 706 billion baht in fiscal 2023, primarily due to Thailand’s rapidly aging population. He predicts that social-welfare expenses will amount to 1 trillion baht by fiscal 2033. To mitigate this budgetary strain, Pornchai suggested several measures that the government can implement.
Encouraging Retirement Savings and Healthy Living
By motivating employees to save more for their retirement, the government can reduce costs and concentrate on managing increasing social-welfare expenses for those who need it the most. Pornchai also suggested encouraging citizens to obtain health insurance and engage in self-care, which, along with ensuring adequate healthcare facilities, can increase the number of individuals capable of working.
Employment Incentives for Seniors
Healthy senior citizens in their 60s can be incentivized to seek jobs, while employers can be provided with income-tax deductions to hire seniors. Furthermore, according to Pornchai, the government should establish a unit dedicated to analyzing and reporting on Thailand’s aging society and its economic repercussions.
Learning from Developed Countries
Pornchai mentioned that countries like European nations, the United States, and others with aging populations have set up government entities that research aging and its effects, providing guidance on how to adapt and alleviate repercussions. Thailand could mimic this approach to managing its own concerns.
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