Prime Minister Abhisit Vejjajiva on Wednesday rejected requests by auto industry operators for the government to cut excise taxes by three per cent, but not more than Bt15,000, across all models, individual tax rebates for car buyers and a government guarantee for downpayments on new vehicles. (TNA)
Bravo Abhisit. A courageous (look at the bailout hysteria in the world) and wise decision.
I’m punching Abhisit non-stop since the Frankenstein coup last december, so I’ve got no problem to acknowledge when he’s doing or saying something meaningful. 😉
First, Thailand hasn’t the financial means for those tax cuts, anymore. Second, tax cuts are too short term, they solve nothing. It’s a sugarcoating. Third, it’s obvious that after car industry, many other businesses would ask the same. I mean we all can ask for a bailout. Potentially
Last point : if the thai (sorry… the japanese) car industry wants help… they have to cut… their prices ! Then they will increase their sales.
All those morons (in Thailand but everywhere else) refuse deflation. They cry for Big Mama (the nanny state). They are not entrepreneurs. They are weak bureaucrats.
Deflation is not something you can choose, or avoid or refuse… You can merely gain time.
Deflation is a normal and healthy process. It’s a mean to rebalance things that are deeply unbalanced.
Insane assets valuation. Insanes debt amounts The solution : a dirty and violent deflation.
Of course, many people would lose their shirts, their positions during the process. So what ? Society evolves. It’s the creative destruction of Schumpeter.
So dear japanese car makers : reduce your costs, lay off workers, reduce wages of executives, reduce selling prices, cut the rotten branches, increase your R&D, reduce marketing and advertising budget, increase your efficiency, reinvent your business model if the current one is dead, etc…
This is the bitter medecine we have to drink. All of us.