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EDITORIAL: Nothing
but promises from Ma
President Ma Ying-jeou (馬英九) announced on two separate occasions this past week
that he was determined to implement pension and financial reforms which, if left
undone, risks sending the government off a “fiscal cliff” in the not so distant
future. Ma’s track record as a reformer is pretty abysmal. He has never managed
to overhaul the Chinese Nationalist Party (KMT) or meet other reform pledges.
Can the public really expect anything more from him this time?
The biggest obstacle to the much-needed reforms has long been the KMT itself.
Its core constituency is made up of the same current and retired government
service personnel (military, civil service, public school teachers) who benefit
most from the system as it now stands. KMT lawmakers block reform proposals in
committee or vote them down on the legislative floor, as they have done for more
than a decade. KMT lawmakers even recently accused Ma of “pandering” to the
opposition parties over the token efforts at pension insurance reform.
Ma met this week with the heads of the five branches of government –– Premier
Sean Chen, Legislative Speaker Wang Jin-pyng (王金平), Control Yuan President Wang
Chien-shien, Examination Yuan President John Kuan (關中) and Judicial Yuan
President Rai Hau-min (賴浩敏) –– to discuss the reform efforts. He has also met
with KMT delegates, yet has proven less willing to hear voices from outside the
government or the party. The Executive Yuan has scheduled more than 100 public
hearings on fixing the problems with the government pension plans, but these are
likely to be nothing more than a placebo aimed at placating public discontent.
Much of this fall’s political discourse has been dominated by the controversy
over year-end bonuses given to government service retirees. Chen’s proposal in
October to cut the number of retired government-service workers eligible for the
year-end bonus from 445,000 to 10,000 (a figure later revised by the
Directorate-General of Personnel Administration to 42,000) would make
significant savings in the original budget of NT$20.2 billion (US$694.1 million)
for the bonuses, but he hedged his bets by saying it might be just a one-time
cut. That was still too much for KMT legislators.
This uproar over bonuses has obscured a key element of the pension program for
government workers that is much more costly to the government: The 18 percent
guaranteed interest rate on preferential savings plans, which has been in place
for almost 30 years. The government pays the difference between the 18 percent
rate offered to its retirees and the average rate offered by banks on time
deposits. Since the average time deposit rate has been just above 1 percent for
years, the government is losing about NT$70 billion annually to prop up the
special savings rate.
In January last year, Ma talked tough about revising the guaranteed interest
rate program, issuing a directive to the Executive Yuan to help make the program
fairer. As KMT chairman, he also instructed the KMT to ask party legislators to
push through the necessary legal amendments. However, his ire was only directed
at reforms to the program made by the previous Democratic Progressive Party
administration, which he said favored “top-level” government officials.
“Our goal is to make policy meet public expectations for fairness and justice,
and we will amend the law and revise regulations to reach this goal,” Ma said at
the time, adding that public perceptions would be taken into consideration when
revising the policy.
So here we are 23 months later and what has been accomplished? The preferential
savings rate program remains in place, legislators are hung up on the more minor
year-end bonus scheme, and all we get from Ma are more promises.
The president’s track record speaks louder than he does. The chance of truly
well-planned and effective reform appears minimal at best.
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