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Annuity reforms unpopular but necessary: Ma Ying-jeou

Publication Date : 24-04-2013

 

Taiwanese President Ma Ying-jeou said yesterday that if the administration doesn't carry out a comprehensive reform of the nation's annuity programs, the insurance funds of military personnel, public school teachers as well as labourers and civil servants will face bankruptcy in 2019, 2027 and 2031, respectively.

Ma said that although none of the funds will go bankrupt within his last term at president, he cannot turn a blind eye to the looming dangers, even though reform policies are often highly unpopular.

When asked if the reform policies will cause the ruling party to lose substantial votes from its traditional strongholds of the military, education and civil service sectors, the president said that it is difficult to predict what the outcome might be.

Ma said that he has attended several related forums in which he has encountered both support and anger over the administration's plans, adding that all he can do at this point is to explain as honestly as possible what the funds' financial circumstances are.

The president expressed support for Taiwan's Examination Yuan chief Kuan Chung's plan to overhaul existing regulations regarding civil servants' annuities and pensions.

All Cabinet members are willing to give up their 18-per cent preferential interest rates for the sake of the greater good, Ma said.

If everyone paid more and received less, the funds can put off the dangers of bankruptcy for three decades, the president explained.

Aim, effect of taxes

In response to the stock market's lacklustre performance, Ma said that the administration is of course willing to review policies regarding the previously passed stock gains tax, but since the government has yet to receive revenue from the levy, its actual effect on the stock exchange remains to be seen.

The president explained that he had consulted Finance Minister Chang Sheng-ford on the issue, during which the minister explained that although the stock gains tax is one of the contributing factors of the stock market slump, it is not the only factor nor is it the most important one.

In response to angry protests over the planned levy, Ma said that the tax can of course be reviewed.

The president said that during several forums with grassroots and senior members of the Kuomintang, he has heard requests to abolish the tax from businesspeople; however, some have also offered counter arguments, maintaining that it is reasonable to impose the tax as long as investors are profiting from the market.

With regard to the luxury tax, Ma said that most of those who initially opposed it were pan-blue supporters who argued that since the tax's revenue was so low it might as well be abolished.

The government made it very clear from the beginning that the tax was not designed to increase the nation's coffers, the president said, adding that it was implemented as a measure against opportunistic investments on the realty market.

With regard to this objective, housing bubbles in Taipei and New Taipei have seen decreases, the president added.

 

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