Taiwan Tati Cultural and Educational Foundation

 
  • Increase font size
  • Default font size
  • Decrease font size
Home Editorials of Interest Taipei Times Preferential 18% interest rate is not defensible

Preferential 18% interest rate is not defensible

In a situation where few can feel the economic recovery and where there is no growth either economically or in the employment rate, the 18 percent preferential interest rate on the savings of military personnel, civil servants and teachers merely serves to reinforce the feeling of unfairness and deprivation among the general public.

A political avalanche is in the making and it will bury the Chinese Nationalist Party (KMT) if it insists on supporting the 18 percent interest rate for these privileged groups.

The treatment of retired civil servants and the general public could not be more different. We are all citizens of the same nation, but while one group enjoys an 18 percent preferential interest rate on savings, everyone else receives 1 percent.

This is not only unfair, it is outrageous. No matter how the KMT and the government try to defend their position, they convince no one. One reason the reaction has been so vigorous was Examination Yuan President John Kuan’s (關中) explanation that civil servants are simply different from common people.

The Ministry of Civil Service argued that the introduction of reforms including the preferential 18 percent interest rate would save the nation NT$100 million (US$3.45 million) over five years, though this claim was immediately criticized as being less than it seemed.

Currently, the government spends more than NT$75 billion annually financing its preferential interest rate policy. That is almost NT$400 billion over five years of which NT$100 million represents just 0.025 percent.

This system is unfair and it speaks to an historical unfairness that reminds people how the KMT has consistently favored military personnel, civil servants and teachers. Their children have received educational subsidies while those of farmers and workers have not. Military personnel and teachers have also been exempt from paying taxes for decades, a benefit that will only be abolished next year, but they will be reimbursed for any money taken away in taxes.

Which other professions receive such privileged treatment?

Kuan defended the preferential interest rate by saying that civil servants are different from common people and that the country would take care of anyone with the ability to pass the civil service examination. However, any such statement is historically nonsensical when the channels to becoming a civil servant are a root cause of unfairness.

The KMT devised a way to select civil servants based on a provincial quota that was only abolished in 1994 following a constitutional amendment. The quotas were applied to all Chinese provinces, which meant that the acceptance rate for examinees whose home province was Taiwan was much lower than for those of candidates from other Chinese provinces.

In addition, almost 50 percent of soldiers who took the exam to transfer into the civil service were accepted, and they were the first to enjoy the preferential 18 percent interest rate.

This preferential interest rate has created and is creating unfairness, but the government continues to defend it. The KMT lost the township chief by-election in Caotun Township (草屯), Nantou County, the first election in the centennial year of the Republic of China. People are unhappy, and this defeat is only the beginning of a political avalanche that will bring down the KMT and cause it to disintegrate in next year’s legislative and presidential elections.

Hu Wen-hui is a media commentator.

TRANSLATED BY TAIJING WU
 


Source: Taipei Times - Editorials 2011/01/15



Add this page to your favorite Social Bookmarking websites
Reddit! Del.icio.us! Mixx! Google! Live! Facebook! StumbleUpon! Facebook! Twitter!  
 

Newsflash

The odds of President Ma Ying-jeou (馬英九) being re-elected in 2012 yesterday fell below 50 percent for the first time since May, according to a university prediction market.

Prediction markets are speculative exchanges, with the value of an asset meant to reflect the likelihood of a future event.

On a scale from NT$0 to NT$100, the probability of Ma winning a re-election bid was, according to bidders, NT$48.40, the Center for Prediction Market at National Chengchi University said.

The center has market predictions on topics including politics, the economy, international affairs, sports and entertainment. Members can tender virtual bids on the events, with the bidding price meant to reflect probability.

The re-election market had attracted 860,000 trading entries as of yesterday. It was launched in April.

The center said the figure slipped 2.3 percentage points yesterday from a day earlier, when Ma conceded that his party did not fare as well as hoped in the “three-in-one” elections.

The Chinese Nationalist Party (KMT) won 12 of Saturday’s 17 mayor and commissioner elections, but its total percentage of votes fell 2 percentage points from 2005 to 47.88 percent of votes nationwide.

The Democratic Progressive Party (DPP) won just four of the races, but received 45.32 percent of the ballots, or a 7.2 percentage-point increase from 2005.

Since the center opened the trading on Ma’s re-election chances on April 11, prices have largely hovered around NT$60, but jumped to NT$70 in mid-June. The figure then fell to NT$51.80 in August after Typhoon Morakot lashed Taiwan, killing hundreds.

After then-premier Liu Chao-shiuan (劉兆玄) resigned in September, the price returned to NT$63.2 and remained at around NT$60 for the following two months, the center said.

Since Ma took over as KMT chairman, the center said the number had steadily declined from NT$58 on Nov. 18 to NT$50.80 on Dec. 5. After Saturday’s elections, the figure fell below NT$50.

The center said the outcome yesterday would likely affect next year’s elections for the five special municipalities, as well as the next presidential election.

It also said the probability of Taipei Mayor Hau Lung-bin (郝龍斌) winning re-election was 72 percent, while the chances of Taipei County Commissioner Chou Hsi-wei (周錫瑋) winning again were 20 percent.

Source: Taipei Times 2009/12/07