Wed, Dec 04, 2013 - Page 8 News List

EDITORIAL: Cutting bonuses is not the answer

It is absurd to place the full blame for the nation’s fragile economic growth on the government’s economics officials and then punish them by slashing their year-end bonuses. The revision of bonuses is not an appraisal program, as this bizarre system, which is rarely seen outside Taiwan, was originally designed to show the sympathy government officials had for the general public during tough economic times.

Legislators take the revision mechanism more seriously than they should. They recently scaled back the time and effort they put into grilling government officials about new stimulus measures to help improve the economy, which is expected to grow by less than 3 percent for a third consecutive year next year. The “issue” of which government officials should be disqualified from receiving year-end bonuses, however, has become a priority. The entire episode and the arguments it has created have turned the legislative body into a theater for political farce.

The latest victim is Council for Economic Planning and Development Minister Kuan Chung-ming (管中閔). Legislators passed a resolution on Monday to halve his year-end bonus of approximately NT$280,000, which is 150 percent of his monthly salary, and freeze the remaining half. He was considered to be one of the government officials responsible for Taiwan’s weaker-than-expected predicted GDP growth of 1.74 percent this year. The figure is far less than the 4 percent Kuan originally forecast.

In addition to Kuan, Minister of Economic Affairs Chang Chia-juch (張家祝) has also had his bonus cut. According to the legislators’ resolutions, the two government officials will be able to receive half of their year-end bonus if GDP recovers to exceed 3 percent or if the unemployment rate falls below 4 percent for two consecutive months — it has been above 4 percent for the past 14 months.

It is not fair to blame these two officials for the nation’s weak economic growth. GDP figures are not easy to predict, and it is not right to use them to gauge the performance of any government official. The situation is more complicated than that. Taiwan is an export-oriented economy, meaning that it relies heavily on global demand to drive growth. Outbound shipments of services and goods account for 70 percent of Taiwan’s GDP. Exports will vary in line with demand from major trade partners — China, the US, Europe, ASEAN and Japan.

What really matters is whether government officials are capable of drawing up and putting into effect good economic policies that will boost the economy.

Only economics officials are judged by GDP figures and their performance goes on trial every year. If legislators are so obsessed with numbers, the country’s crime rate could be considered as a gauge to see whether Minister of Justice Lo Ying-shay (羅瑩雪) does her job well.

What makes using only GDP figures inappropriate is that it may push officials to come up with more short-term approaches to make the situation appear better. This could undermine efforts to map out long-term economic development policies, which are crucial to the country’s future economy.

However, legislators and possibly government officials as well focus more on short-term remedies to fix the economy and have failed to recognize the importance of Taiwan fitting into the global economy.

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