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Taiwan passes controversial bill cutting veterans’ pensions
TAIPEI, June 21, 2018 (BSS/AFP) – Taiwan’s military veterans will see their
pensions cut as soon as next month after parliament passed a controversial
bill that had sparked violent demonstrations.
Wednesday’s vote marks a victory for President Tsai Ing-wen, whose
attempts to make sweeping pension cutbacks since she came to power two years
ago have faced intense opposition.
Senior veterans will see their monthly stipend cut by more than 20 percent
over the next decade, after a smaller initial drop, according to official
estimates.
The government says veterans of lower ranks will see less severe cuts to
their pensions.
Tsai has said pension reform is her most important task, with official
reports warning that an unreformed pension system could be bankrupt by 2020.
But thousands of veterans and other civil servants have regularly gathered
outside parliament to protest the cuts.
Dozens of police officers and reporters were injured in a clash in April
when protesters threw smoke bombs and used chains to try to pull down a gate
and storm parliament.
Tsai said her government has completed the critical reform that “every
leader had wanted to do”, but did not.
“We now have a Taiwan with a sound and well-structured system where every
young civil servant, teacher, and military personnel can be sure of their
pensions,” she told reporters on Thursday.
She said the reduced expenditures will be injected back into the pension
funds to make them more sustainable.
Tsai admitted some retirement plans will be affected, apologising and
thanking veterans for their sacrifice.
“It is hard for third parties to understand that feeling of discontent and
helplessness for most of those who will have less money in their pockets,”
she said.
But she said the majority can understand the country’s predicament “even
though there has been a lot of emotions and dissatisfaction in the course of
reform”.
A former lieutenant-colonel will initially see their monthly stipend cut
from Tw$70,797 ($2,340) to Tw$69,353, and eventually to Tw$56,360 after ten
years, according to government estimates.
The majority of public sector retirees are supporters of the opposition
Kuomintang (KMT) which relinquished its majority in Taiwan’s parliament for
the first time in 2016 after losing elections to Tsai’s Democratic
Progressive Party (DPP).
Legislators passed a separate pension reform bill last June that targeted
civil servants. The government hopes both bills will come into effect on July
1.
In the past the government offered generous incentives to public sector
employees to compensate for low starting salaries.
As Taiwan’s economy has slowed down in recent decades government jobs have
become increasingly attractive, placing additional burdens on state finances.
BSS/AFP/IJ/1401 hrs