Cabinet approves 3% pay hike for public servants

The Cabinet yesterday approved a 3 percent pay hike for civil servants, members of the military and teachers next year -- the first such increase in three years.

If the pay raise is approved by the legislature, the highest-ranking civil servants will earn 4.95 percent more than their lowest-ranking counterparts.

Cabinet Spokesman Chen Chi-mai (陳其邁) told reporters yesterday morning that it was time to increase civil servants' salaries because there had not been an adjustment in the past three years.

"The proposal has won the backing of President Chen Shui-bian (陳水扁) after Premier Yu Shyi-kun briefed him about the plan," Chen Chi-mai said.

According to Central Personnel Administration Director-General Lee Yi-yang (李逸洋), the pay rise will cost the government NT$18 billion a year.

"We're well aware that the Cabinet is still seeking to fill the NT$9.4 billion deficit in the government's budget proposal for next year, but I'm confident that the Budget and Accounting Office will find the money to fund the raises," Lee said.

Possible financial sources for the scheme might include the annual surpluses of state-owned enterprises and tax revenues.

Lee said that the administration was well aware that the government has financial difficulties.

"However, financial plight should not be the sole factor taken into account in the pay rise initiative," Lee said.

Despite the financial difficulties, Lee said that this year's economic growth is projected to reach 5.41 percent. GDP per capita is estimated at US$13,651, or a 7.28 percent increase from last year's US$12,725.

This year's consumer price index (CPI) is forecast to rise by 0.83 percent. The CPI from January to July this year has seen a 1.2 percent increase.

The average monthly salary in the private sector between January and May this year was NT$46,709, which is 2.13 more than the average salary in the same period last year. The average monthly salary in the private sector in 2002 was NT$41,667 and last year it was NT$42,287.

According to Lee, high-ranking officials earn 15 percent less per month than their private-sector counterparts while mid-ranking government officials earn 25 percent less. Low-ranking officials, however, earn more than their private counterparts.

Another reason for the pay rise, Lee said, was that the salaries of civil servants have not yet been adjusted since 2002.

"As most developed countries -- such as the US, France, Germany and South Korea -- have increased the salaries of their civil servants since 2002, we thought a 3 percent pay rise for our civil servants would be a good boost for morale," Lee said.

According to Lee, US bureaucrats received a 3.6 percent pay rise in 2002, 4.1 percent last year and 2.7 percent this year. Civil servants in Germany got a 2.2 percent raise in 2002, 2.4 percent last year and 2 percent this year.

Civil servants in South Korea received a 8 percent salary hike in 2002, 5.5 percent last year and 3.2 percent this year.