Fri, Nov 28, 2008 - Page 1 News List

Presidential Office rejects calls for salary reductions

MONEY MATTERS An official warned that cutting pay for top officials smacked of ‘populism’ and was not worthy of consideration

By Ko Shu-Ling And Flora Wang  /  STAFF REPORTERS

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.

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