The ability and determination to transform campaign promises into real policies are what make a good — albeit not necessarily popular — leader. In President Tsai Ing-wen’s (蔡英文) case, she seems to have achieved both with pension reform.
A poll released by the Taiwan Style Foundation on Wednesday found that 62.8 percent of respondents were satisfied with the Tsai administration’s pension reform bills targeting retired civil servants and public-school teachers that cleared the legislative floor late last month.
A total of 68.1 percent of respondents said that Tsai’s pension reform had a positive influence on Taiwan’s future development, with 61.9 percent viewing the passage of the reform bills as a major achievement of the Democratic Progressive Party (DPP) administration.
Initially, some were skeptical about whether the reform success would actually translate into greater popularity. One of the main reasons that deterred former president Ma Ying-jeou (馬英九) from pushing pension reform through a Chinese Nationalist Party (KMT)-dominated legislature during his presidency was a possible public backlash.
Perhaps it is biased to jump to a sanguine conclusion only by looking at the poll by the Taiwan Style Foundation, which found that Tsai’s approval rating climbed 4.9 percentage points to 51.6 percent from a July 3 survey, given that it is a relatively pan-green organization. However, a similar survey published by the pan-blue TVBS poll center a week earlier also found that the president’s approval rating rose by 8 percentage points, from 21 percent last month to 29 percent.
Despite the wide gap between Tsai’s approval rating in polls by the two organizations, what they have in common is an upward trend in the president’s approval figures, which is expected to continue over time. The reason is simple: Pension reform has been a catchy phrase that many politicians like to dangle in front of voters, but few have actually gone beyond lip service or seen through their reform attempts without succumbing to pressure from interest groups, an uncooperative legislature or fears of losing pubic support.
Ma and former president Chen Shui-bian (陳水扁) tried to reform the highly controversial 18 percent preferential interest rate on savings of public-sector retirees who were hired before the introduction of a new pension system in 1995. It has been harshly criticized by the public, mainly because at a time when most banks offer only a meager interest rate of about 1 percent, the preferential rate is eating away nearly NT$80 billion (US$2.6 billion) of government money each year.
According to one estimate by Minister Without Portfolio Lin Wan-i (林萬億), who serves as the deputy convener of the Presidential Office’s Pension Reform Committee, the preferential interest rate, despite having been scrapped, would not really end until 2054, as public employees who were hired before 1995 are still entitled to it after their retirement.
Chen, who led a minority government during his eight-year presidency, succeeded only in reducing the amount of a retiree’s pension that was eligible for the preferential rate by putting a cap on their income replacement ratio, without cutting down on the rate itself. The Ma administration’s reform proposals, which originally planned to reduce the rate to 9 percent, were reportedly stalled due to electoral concerns.
In sharp contrast, Tsai’s pension reforms are set to reduce the preferential rate to zero within two years after the bills’ scheduled promulgation in July next year, and introduce other policies aimed at “normalizing” civil servants’ income replacement ratio.
While the reforms are likely to go down in history as one of Tsai’s most significant legacies, her government has other things to worry about, including the spread of fake news online seeking to distort its reform plans and potential Chinese influence behind some protesters, who have been shadowing the president and threatening violence. Unfortunately, these two problems might be harder to deal with than pension reform.
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