01/11/2013, 00.00
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Despite year-end bonus cuts, economy still strong

by Xin Yage
As government seeks savings, private sector and opposition criticise the privileges of public servants and employees in state-run enterprises. Taiwan's per capita GDP is now higher than that of France, Finland and Japan. Opposition plans a rally this Sunday to protest budget.

Taipei (AsiaNews) - The decision by Taiwan's parliament (立法院 or Legislative Yuan) to cut year-end bonuses (thirteenth month) to public servants and employees in state-owned companies has led to protests.

Currently, employees of state-run businesses can get maximum year-end bonuses equal to 4.6 months of their salaries, including 2.6 month for performance.

Now lawmakers set a 1.2 month bonus cap, slashing the 2.6 months' bonus, whilst maintaining the regular 2 month bonus, for a total of 3.2 month year-end bonus.

The cap was agreed to during negotiations for the 2013 budget. Opposition party Taiwan Solidarity Union (台灣團結聯盟) had called for the elimination of year-end bonuses for underperforming state corporations. During the debate, a compromise was reached to reduce the bonuses whilst acknowledging the work of employees in profitable state-run enterprises.  

Legislators also gave their nod to the proposal to limit year-end bonuses for retired civil servants, teachers and servicemen so that they would only apply to those with monthly pensions of less than NT$ 20,000 (US$ 690) and the families of those injured or killed on duty.

For trade unions, bonus cuts are an insult to employees. For the past week, they have protested insisting that underperformance cannot be pinned on employees since their employers follow government directives. If anyone is to blame, it is the government.

Private sector workers, including private school teachers, disagree, saying that public servants and employees in state-run corporations have privileges that they can only dream of.

For this reason, the Democratic Progressive Party (民主進步黨), the main opposition party, believes that state companies like Taiwan Power Co (台電) and the Taiwan Water Corp (台水) cannot afford year-end or productivity bonuses given their recent losses.

The opposition has called on the government to change its 2013 budget and plans a mass rally next Sunday.

The government said it would respect parliament's decision but has called for a more targeted approach that would distinguish enterprises that are performing well from those that are not.

Despite these problems and high real estate prices, a burden especially heavy for young couples, Taiwan's economy has shown a remarkable capacity to weather crises, as it did during the Asian financial crisis of 1997 and the world-wide financial crisis of 2007, thanks to its export-oriented production, high tech and greater innovation capacity.

Except for the recession of 2001, and despite massive Taiwanese investments in mainland China, Taiwan has shown tremendous growth in recent years, hitting a record 10 per cent in 2010.

This has given the island-nation a per capita GDP that is higher than that of France, Finland and Japan with one of the lowest unemployment levels in the world.

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