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Editorial: Ma must
move on state-owned firms
Last week, lawmakers at the Economics Committee decided to limit employee
bonuses at state-run companies during unprofitable years, after the government¡¦s
generous bonus payout plans raised eyebrows among the public at a time when many
state-owned companies are still deep in the red and the nation¡¦s economy is not
performing well. Lawmakers reached a consensus to cap such bonuses at 1.2
months¡¦ salary, rather than the original 2.6 months.
Employees of state-run companies can usually receive annual bonuses composed of
two parts: A maximum of up to 2.6 months¡¦ salary awarded based on the company¡¦s
performance and a maximum of up to two months¡¦ salary based on employees¡¦
performance. Under the new deal, which will save the nation¡¦s coffers as much as
NT$28 billion (US$970 million) a year, the upper limit of employees¡¦ annual
bonuses will be lowered to 3.2 months¡¦ salary from the original 4.6 months.
The government tried to argue that employees at state firms deserve hefty
bonuses, but the general public believe that companies, whether state-run or
privately owned, distribute bonuses because they are making enough money to
share their earnings with employees. However, what people have seen from the
five state-run companies, especially refiner CPC Corp, Taiwan, and utility
Taiwan Power Co (Taipower), are not only heavy deficits, but also inefficiency.
The government said bonus cuts would make it harder for state-run companies to
recruit or retain talent, but the general public see such statements as implying
that bonuses are not awarded based on performance, but instead are an insurance
against employees leaving for private firms.
Employees at state companies have reason to be angry, as they have become
scapegoats for the poor performance of management and the government agencies to
which they report. However, some union representatives¡¦ threats to strike over
the bonus issue have caused feelings of unfairness among the general public, who
pay taxes to keep their companies afloat. No wonder people are furious and want
to protest in the streets today.
The bonus dispute has exposed the fat salaries at state companies and reminded
people of the perennial issue of their lack of competitiveness. It has re-raised
questions as to when the government will overhaul or even privatize these
companies.
For more than a decade, the government has repeatedly vowed to push forward
reforms for state companies in the face of mounting criticism by the public.
Over the years, we have seen the government take no initiative on this issue,
instead playing catch-up by offering a patchwork of belated measures ¡X some
measures for the companies¡¦ internal management here, some for their procurement
practices there, and others focused on their investment projects.
It is clear that the government¡¦s reform efforts have so far proved ineffective
and the biggest problem is an inability to overcome obstacles posed by strong
vested interests in such companies. One has to wonder how the government can
ever move to turn these companies into private entities if it lacks strong
leadership and determination.
About 30 years ago, then-British prime minister Margaret Thatcher was harshly
criticized for a policy of privatizing state-owned industries, but nowadays it
seems clear that she achieved something that would have been unthinkable before
and her accomplishments have had a long-term impact on the British economy.
Taiwan can learn from the privatization experiences of the UK to transform its
state firms into real business entities. However, that demands a government that
is able to meet all challenges and move forward courageously. If President Ma
Ying-jeou (°¨^¤E) and Premier Sean Chen are serious about this issue, they should
do it quickly before people take to the streets to vent their anger.
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