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EDITORIAL: Public
sector raise is unfair
The government is set to announce a 3 percent hike in salaries for military
personnel, civil servants and teachers, a move that would increase state
expenditures by NT$21 billion (US$722.5 million) a year. This is a classic
example of raising salaries for the few, with an eye on elections, and the
burden being spread over the majority. Not only is this unfair, it is also
unlikely to achieve the government¡¦s professed objective of stimulating salary
increases in the private sector.
Since President Ma Ying-jeou (°¨^¤E) came to power, he has concentrated on the
economy. Even now with figures pointing to an economic recovery, ordinary people
don¡¦t seem to be getting any of the benefit. Concerned about the Chinese
Nationalist Party¡¦s (KMT) chances in the looming legislative and presidential
elections, the government has decided to increase public sector salaries in an
attempt to affect those in the private sector through a kind of financial
osmosis, hoping that salaried workers will see real benefits from the recovery.
The central government received more than NT$1.6 trillion in tax revenue for
last year, but still recorded a NT$4.4 billion deficit. This year, the nation¡¦s
accumulated debt is expected to total NT$159 billion. The government will have
to finance the proposed salary increase with debt. Furthermore, the salary
increases will be accompanied by upward adjustments to pensions for retired
military personnel, civil servants and teachers, as required by law, putting
even more pressure on a pension fund already on the brink of bankruptcy. Again,
this will come out of the taxpayers¡¦ pocket and may even mean higher taxes.
At present, the average monthly salary for public sector workers is NT$60,000.
Civil servants also get a range of perks to supplement this, such as
preferential mortgage rates, 50 percent discounts on amenities bills and certain
expenditures for their children¡¦s education, state pension payments, 18 percent
preferential interest on savings, a monthly pension, a year-end bonus and travel
discounts. They already get a better deal than many people in the private
sector. There is still much anger in Taiwan remaining from the recent 18 percent
preferential interest rate controversy and this proposed salary increase will
exacerbate the sense of relative deprivation.
Although the government has called on the private sector to follow its lead,
only a small number of companies, such as TSMC and Formosa Plastics, have
promised to do so. Other companies in highly competitive industries, or small
and medium-sized businesses, are too busy worrying about rising costs and
generating adequate revenues. If they do relent to pressure from the government
and raise salaries, they might find themselves forced to relocate in the medium
or long term and this will mean that workers lose their jobs altogether.
There¡¦s nothing wrong with increasing people¡¦s salaries, but there¡¦s no sense in
robbing Peter to pay Paul. If the government wants to raise salaries, it needs
to balance its books first and spend money on things like improving
infrastructure or increasing welfare expenditure to redistribute wealth to
low-income earners and do something to reduce the wealth disparity. If the
government wants to lavish attention on public servants, it should also look out
for the rest of the populace, as is only fair and just. If only a minority gets
to reap the economic rewards and these are not passed on to the majority, or to
more vulnerable groups, it is likely to cause a sense of relative deprivation.
The policy is flawed as a piece of electioneering ¡X it is true that it will
secure the vote of those who will get raises, but it will also alienate many
more voters.
The proposed salary increases are too selective. Why not increase the tax
exemption level and put money in everyone¡¦s pockets? Another option would be to
follow the example of Hong Kong and distribute cash handouts.
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