Mon, Jan 12, 2009 - Page 8 News List

Municipal mergers could hurt the nation

By Lin Cho-shui 林濁水

While the global economic crisis has resulted in unemployment and salary reductions in the private sector, Hong Kong and Singapore have also reduced the wages of their public servants.

President Ma Ying-jeou’s (馬英九) administration, however, is considering raising the wages of civil servants following Cabinet approval of a proposed amendment to the Local Government Act (地方制度法) on Nov. 20 allowing Kaohsiung and Taichung cities and counties to merge into special municipalities.

When a county and a city merge into a municipality under the jurisdiction of the national government, personnel organization will expand and ranks will advance. Last year, when Taipei County was qualified to merge with Taipei City, the county commissioner gleefully planned to promote a great number of government officials and increase the ranks of county government personnel.

But the government under former president Chen Shui-bian (陳水扁) soon realized that the merger was problematic and rushed to halt the process. When Ma took office, he supported the merger plan and said that although Taipei County could not officially merge with Taipei City by next year, it would nevertheless be able to exercise the rights of a special municipality.

Therefore, more than 300 police officers have recently been promoted and the Taipei County government can expand the size of its personnel from 4,100 at present to 15,000. This means that government personnel spending will increase by more than NT$6 billion (US$181 million).

The merger between Taipei county and Taipei City will increase government spending by a frightening amount. The merger between Taichung City and Taichung County would add between NT$4 billion and NT$5 billion in government spending. In most countries, personnel costs account for about 2 percent of GDP. In Japan, the figure is less than 1 percent, while in Taiwan it has reached 4.7 percent. By raising the wages of public servants, the government would only aggravate the condition of its already debt-ridden finances.

Initially, the government emulated Japan’s strategy to expedite urbanization by dividing cites into special municipalities under the direct jurisdiction of the national government and provincial municipalities under direct provincial jurisdiction. With supporting measures, financial resources will be concentrated on cities. As a result, financial expenditures for a special municipality government have now exceeded NT$50,000 per resident while other counties spend less than NT$25,000 per resident. This strategy has widened the division between urban and rural areas.

The government should adopt a plan to balance the development of urban and rural areas as soon as the urbanization process has stabilized. However, the government’s plan to merge Taipei and Taichung counties with Taipei and Taichung cities will widen the gap between urban and rural areas. While Taipei and Taichung counties would gain from the mergers, the 15 counties that fail to be upgraded would become poorer.

In addition, the population of Taipei City would increase to 6.75 million. Its financial expenditures would reach NT$3.415 trillion, accounting for 46.7 percent of total government spending on local governments. Taipei City is like Russia before the collapse of the Soviet Union and the situation could lead to constitutional disaster.

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