Even as President Ma Ying-jeou’s (馬英九) government insists that elderly farmers’ monthly pension payments will only be raised by NT$316 (US$10.40), it is planning a big rise in civil servants’ pensions [although Chinese Nationalist Party lawmakers have decided to raised it to NT$1,000, but this measure has not been passed yet]. It is estimated that the NT$316 hike would cost the Treasury NT$1.5 trillion over the next 22 years.
What justification could there be for such a move, which amounts to robbing the poor to pay the rich, and saddling our children and grandchildren with the resulting debt?
Civil servants have their salaries assessed in different ways and come under different retirement pension systems depending on their status, but all of these arrangements are far better than those enjoyed by ordinary people.
Generally speaking, civil servants can start out by receiving a lump-sum pension payment from the Government Employee and School Staff Insurance (GESSI) plan as soon as they retire, after which they continue to get pension payments every month.
When they are working, employees of state-owned enterprises get higher salaries than those in administrative departments and they receive higher annual performance bonuses. After retirement, in addition to GESSI pensions, they receive a lump-sum pension payment based on their years of service.
State-owned enterprise employees do not get monthly pension payments, but because they are better paid while they are working, there is not much difference between the total lifetime incomes — salaries plus pensions — received by these two categories of government employees, and they have gotten along quite amicably for many years.
That being the case, annuitizing the GESSI is not an urgent issue, but the Ma government has nevertheless been pushing for such a move so as to make a show of looking after civil servants.
We in the Democratic Progressive Party (DPP) think that if the Ma administration wants to go ahead with this, it should only do so in relation to state-owned enterprise employees, who do not get monthly pension payments when they retire.
We also believe that the annuity accrual rate should correspond to the insurance premium, so that it does not create another financial black hole for the government.
The Ministry of Civil Service estimates that government finances will make a loss if the GEESI annuity accrual rate is 0.65 percent or more. Nevertheless, in the version that is being pushed by KMT legislators, everyone’s a winner. Even civil servants who are already entitled to monthly pension payments are to have their annuity accrual rate raised to 1.3 percent.
Over the more than three years during which the Ma government has been in office, it has treated businesses and high income earners to excessive tax cuts, as a result of which the Treasury has lost a great deal of tax revenue.
This, combined with profligate spending, has caused the national debt to climb rapidly, rising by NT$1.39 trillion.
In order to consolidate its voter base among civil servants, the government has now made out a NT$1.5 trillion check for which the whole nation will eventually have to foot the bill.
For the sake of justice for all classes of people in this generation, and for the generations yet to come, we in the DPP are determined to oppose the unfair amendments to the Civil Servant and Teacher Insurance Act (公教人員保險法) that the KMT has proposed and is trying to push through the legislature.
Lee Ying-yuan is a former Cabinet secretary-general.
Translated by Julian Clegg
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