Fri, Jan 14, 2011 - Page 8 News List

Civil service benefits are among best in the world

By Lin Cho-shui 林濁水

Thanks to improved management techniques during the 1980s, many countries reformed their administrations. These reforms followed two main tracks: organizational reform and streamlining the bureaucracy.

In the UK, the number of civil servants was cut from 720,000 to 460,000 between 1980 and 1998, a decrease of almost 37 percent. In the US, the number of civil servants in the federal government was cut from 3.03 million in 1993 to 2.66 million by 1998. Even Japan, where even private enterprise offers lifetime employment, a group of eight cities cut their bureaucracies by 50,000 people between 1997 and 1999.

BOOSTING BUREAUCRACY

In Taiwan, however, administrative reform is constantly obstructed by bureaucrats. During the 1990s, we only managed to freeze the provincial government and the Organic Act of the Executive Yuan (行政院組織法) was only passed last year, delayed by 30 years.

Instead of streamlining bureaucracy, the government has created four new special municipalities, which means that their civil servants can get a pay raise and the cities can increase their bureaucracies by 22,000 people. There is already a large number of superfluous employees, making it increasingly difficult to establish a mechanism for reducing the number of civil servants.

That is also why the benefits offered to Taiwan’s civil servants are among the best in the world.

BALANCE

However, the principle of balancing job security and pay says that with good job security, pay does not have to be that high, and, conversely, with high pay, you don’t need the most advanced job security.

Taiwanese civil servants have among the most secure jobs in the world, with a monthly pension and 18 percent preferential bank interest, giving them an income replacement ratio — the percentage of the working income needed to maintain a desired standard of living in retirement — of almost 95 percent, the best in the world and far ahead of most normal countries.

In some countries, the income replacement ratio for civil servants is between 50 percent and 60 percent. In Japan, for example, it is 34 percent, almost one-third of Taiwan’s, and in Germany it is 40 percent, less than half of Taiwan’s.

OTHER EXAMPLES

In France it is 51 percent, in South Korea it is 67 percent, and in Austria, where it is very high, it is still less than 80 percent.

This kind of comparison makes it even clearer how extremely liberal the compensation is in Taiwan. Even for the most privileged Taiwanese workers the income replacement ratio is not more than 46 percent, far behind the military personnel, civil servants and teachers with their 18 percent interest rate.

According to the -Directorate-General of Budget, Accounting and Statistics, salaries in the private sector have not risen for several years, but the regular salary of a civil servant in 2006 was NT$62,167, compared with a regular salary for a blue collar or service industry worker of NT$36,126.

Both job guarantees and salaries are high for Taiwan’s civil servants. As a result, the treasury is in crisis as personnel expenditures every year make up one-quarter of the national budget, among the highest proportions in the world.

This situation is nothing if not unconscionable.

Lin Cho-shui is a former Democratic Progressive Party legislator.

TRANSLATED BY PERRY SVENSSON

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