Wed, Feb 06, 2013 - Page 8 News List

The rich must support the poor

By Huang Shiao-ling 黃小陵

This kind of arrangement is not unacceptable in itself, on condition there is a further layer of a basic pension underlying the various occupational pensions, in other words a national pension scheme. This basic pension should be paid for out of national tax revenues and every citizen should be able to collect this basic pension.

However, the national pension has been turned into something quite different — another kind of occupational-status-based insurance scheme.

The situation we have now is that people who have jobs join the labor insurance system, while those who do not join the national insurance system. Thus, the national pension system has become an insurance scheme of mutual aid between generations of jobless people.

What the nation needs is to establish a pension system that redistributes income, so we will have to think hard about how to do it. One way would be to integrate the various forms of pension insurance for different categories of people into a single pension scheme for everyone, with mandatory participation for all citizens.

Such a scheme would be financed by setting premiums based on total household income, so that rich people would pay more and poor people would pay less. It would work in a way similar to the National Health Insurance system, which is based on the idea that healthcare is a basic right and should be enjoyed by all citizens, no matter what their occupation.

The right to security in old age should be seen in the same light.

Another approach would be to refer to Sweden’s three-layered pension system. For the first layer, the existing national pension system would be changed into a basic pension guaranteed to all citizens and would be funded through taxes levied by the government on the rich. The second layer would retain the features of the existing insurance schemes for people belonging to the various occupational categories and the third layer would consist of commercial insurance plans.

This system would involve making the rich pay more tax, as that is the only way to bring about the redistribution of social wealth and solve the problem of pensions for workers.

The key point of these two suggested reforms, whether they are funded through insurance premiums or taxation, is that rich people would pay more and serve to redistribute wealth. The unfortunate thing is that, despite the changes in government, successive Chinese Nationalist Party (KMT) and Democratic Progressive Party (DPP) administrations have failed to make serious proposals for a pension system that redistributes income. The same is true of the two press conferences that were held on Wednesday last week.

The proposals set forth by Ma and DPP Chairman Su Tseng-chang (蘇貞昌) had one thing in common: Neither of them was designed to redistribute income. Worse still, both sides are using conflicts of interest between public and private-sector workers to conceal the question that they are so keen to avoid — the question of wealth redistribution.

Huang Shiao-ling is a member of Raging Citizens Act Now and secretary-general of the Taiwan Association for Victims of Occupational Injuries.

Translated by Julian Clegg

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