Taking a long-term view is indispensable to 'fair' reform
The China Post news staffIn the debate being waged across public and private sectors regarding pension and other compensation conditions, there is a pitfall. That is, namely, the lack of a long-term perspective over Taiwan's course of economic development and an understanding of the nature of the difference between government and private business.
February 5, 2013, 12:14 am TWN
Reminding ourselves that there is an important logic behind the existence of government, and that the nation's economic fortunes, will wane and wax as surely as the passing of the seasons will enable the country to feel better about itself, no matter what interest groups one belongs to. Since the public and private sectors are two sides of the same coin, one should have empathy for the other.
Despite the unveiling of the Ma Ying-jeou government's pension reform plans on Wednesday, the process is going to be mired in venomous rancor as the Democratic Progressive Party (DPP) and the Kuomintang (KMT) blast each other and multiple parties feel injured by perceived insult and injustice.
It is critical to strike a balance between adjusting compensation for government employees — whether it's retirement age, year-end bonuses or better-than-average pay — to cope with economic reality, and preserving differences that are at the core of public service.
Government is a not-for-profit organization; its very nature is to protect the well-being of the people by being the largest common denominator. It works as an instrument of justice to resolve conflicts between different parties in society and as a guardian of the peace by fighting internal and external threats, among other functions.
Private enterprise is founded on the logic of maximizing economic gain through products and services, projecting a playing field where creativity and a sound business strategy are rewarded by financial gain. However, wage levels are sensitive to the general state of the economy, and if the size of the pie is not getting bigger due to macrocosmic factors, everybody's share hits a ceiling.
In the case of the 18-percent preferential interest rate for government workers, reform is necessary because although new entrants (after July 1, 1995) into public service don't get this privilege, financial burdens are increasing on the state as private interest rates drop year after year and the state absorbs the difference.