The Presidential Office and the Cabinet yesterday rejected calls for President Ma Ying-jeou (馬英九) and other high-ranking officials to cut their monthly salaries, saying they were worried it risked setting a precedent that could spill over to the private sector, offsetting government efforts to stimulate public spending.
Several Chinese Nationalist Party (KMT) lawmakers on Wednesday proposed following Singapore’s lead by pushing for salary cuts for civil servants during the economic downturn.
Singapore’s Public Service Division said on Monday that top government officials, including Singaporean President S.R. Nathan, Prime Minister Lee Hsien Loong (李顯龍), administrative officers and political, judicial and statutory appointees would see their salaries drop by between 11 percent and 19 percent next year.
Presidential Office Spokesman Wang Yu-chi (王郁琦) yesterday said he believed such an action would have a negative impact.
Wang acknowledged Singapore’s plans to cut the payrolls of government officials and US president-elect Barack Obama’s call for chief executive officers of financial institutions to forego bonuses.
However, Taiwan’s problem was that the public was unwilling to spend money, thereby, worsening an already bleak economic situation, he said.
To tackle the problem, Wang said, the Executive Yuan has announced several measures aimed at stimulating consumption.
He said the Presidential Office was worried widespread salary cuts might have a negative impact on the private sector and the public as a whole.
“The worst-case scenario is that the efficiency of the government’s economic stimulus plan would be diminished, including consumer vouchers,” he said. “That is what worries us.”
A high-ranking official, who asked to remain anonymous, said the issue smacked of “populism” and that it was the consensus of the government and party that “it was an issue that did not deserve any more discussion.”
The party would pressure legislators to drop the topic, the official said.
The official said that when he got the ball rolling, it would not stop at Ma or political appointees, but would affect the private sector and then wage earners.
“The most important thing at the moment is to stimulate public consumption,” he said. “Political appointees must take the lead to spend money. When everybody spends money, businesses will make money. When businesses make more money, people will spend more money.”
If government officials’ salaries were cut, private companies might follow suit and that would offset the efficacy of the government’s economic stimulus plans, including the consumer vouchers, the official said.
“The government is willing to consider all options if they are conducive to energizing the economy, but if not, we will not risk them,” he said.
At a separate setting yesterday, Executive Yuan Spokeswoman Vanessa Shih (史亞平) also rejected the suggestion, saying that the idea ran counter to government efforts to boost spending.
“If this salary cut issue spreads ... and extends from government officials to the private sector, it might compromise [the government’s] well-intentioned plan to stimulate consumption,” she said.
On top of that, the situation in Singapore and Taiwan cannot be mentioned in the same breath because government officials in Singapore have salaries more then 10 times higher than those of their counterparts in Taiwan, Shih said.
Shih said Taiwan didn’t always have to follow the example of other countries.
Legislative Speaker Wang Jin-pyng (王金平), on the other hand, yesterday urged high-ranking government officials to consider taking a pay cut to show the government’s determination to get through the economic downturn.
Wang said the heads of five major government branches — the Executive Yuan, the Legislative Yuan, the Judicial Yuan, the Examination Yuan and the Control Yuan — and high-earning officials should consider voluntarily cutting their salaries, even though the move would not have any substantial effect on the nation’s economy. Wang said he was willing to take a pay cut of up to 20 percent, but did not support expanding the cut to all government employees.
“We should respect the current pay scale of public officials and look after all government employees,” he said.
Wang declined to comment when asked if lawmakers should also take a pay cut.
KMT caucus secretary-general Chang Sho-wen (張碩文) told a press conference yesterday that all legislators should take a pay cut if necessary. KMT caucus deputy secretary-general Lo Shu-lei (羅淑蕾) said she supported the idea even though many legislators had a lot of bills to cover. Chang also urged state-run enterprises and state-run banks “that did not perform well” to consider revising salaries and year-end bonuses.
While urging officials to take a pay cut, Democratic Progressive Party (DPP) Legislator Lin Shu-fen (林淑芬) yesterday urged Ma to make good his campaign promise to forego half of his salary should he fail to fulfil his “6-3-3” campaign pledge. The “6-3-3” economic policy refers to the goal of achieving annual GDP of 6 percent, annual per capita income of US$30,000, and an unemployment rate of less than 3 percent.
Lin also called on Premier Liu Chao-shiuan (劉兆玄) to step down.
ADDITIONAL REPORTING BY SHIH HSIU-CHUAN AND JIMMY CHUANG
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