National liabilities have surged with the much-expected pension reform stalled, according to information from the Directorate-General of Budget, Accounting and Statistics (DGBAS).
Total liabilities accrued by all levels of government have reached NT$18.05 trillion (US$586.42 billion) — NT$909.5 billion more than the figure recorded at the end of 2013 and NT$5.03 trillion more than that of four years ago, information from the agency showed.
The retirement pensions for military personnel, civil servants and public school teachers and labor insurance are the two main contributors to the total, with the former accounting for NT$8.66 trillion and the latter NT$8.77 trillion.
However, while the number of working and retired military personnel, civil servants and public school teachers is only one-tenth of private-sector workers, the liability contributed by the former is close to that of the latter, demonstrating how heavy the pension system burden is for the group.
The data provided by the government’s statistics office show that public debt —including debt regulated by the Public Debt Act (公共債務法), short-term debts and debts owed by nonprofit government funds — is about NT$7.09 trillion.
Adding that to the liability of NT$18.05 trillion leaves the government carrying a total debt of NT$25.14 trillion, meaning that each Taiwanese national is responsible for at least NT$1.07 million of national debt.
However, as the Ministry of Finance’s debt clock does not take into account central government liabilities and debts owed by non-profit government funds and local governments, the debt per citizen as of the end of March according to the debt clock is NT$239,000.
The DGBAS reiterated that liabilities are payments that the government is obligated to pay in the future, which could be supported by adjusting the premium rate and differs from debt from government loans specified in the Public Debt Act.
The DGBAS has been making public the government’s liabilities since 2009, and other than in 2010, the figure has been on the rise. In 2011, there was a sudden increase of NT$2 trillion, pushing the total to NT$14.99 trillion.
Govenrment liabilities reached NT$16.40 trillion in 2012; NT$17.14 trillion in 2013; and NT$18.05 trillion last year.
Last year’s increase came mainly from labor insurance, with NT$672.7 billion added, pushing the total for labor insurance liabilities to NT$8.77 trillion. The DGBAS said that the labor insurance liability is such because the current premium rate is much lower than the calculated optimal rate, which is 27.84 percent, and that the continued growth of the liabilities is because of the cost incurred by the yearly increase of the 9.66 million policyholders’ years of service.
The liabilities of retired public officials’ pension reached NT$2.77 trillion last year, witnessing an increase of NT$184.7 billion from the year before. The pension allotted for military personnel, civil servants and public school teachers under the old pension system was NT$5.74 trillion, which was NT$55.7 million less than the year before, because the number of retirees entitled to the pension under the old system has been decreasing.
With insurance benefits for public teachers at NT$119.8 billion and that for military personnel at NT$37.8 billion, the total liabilities of the pension system for military personnel, civil servants and public school teachers reached NT$8.66 trillion last year.
Also notable was that the liabilities revealed by the DGBAS does not include compensation to be paid for land reserved for public facilities.
According to the Ministry of Finance, there are approximately 6,000 hectares of roads that have been publicly used, but are actually privately owned, and 27,000 hectares of land reserved for public facilities, the costs of acquisition for which are respectively about NT$2 trillion and NT$6 trillion.
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