NO CREDIT: The premier has reinstated a pay rise proposal based on the performance of the TAIEX, which has stayed above the 10,000-point mark for the longest-ever period
By Chen Wei-han, Crystal Hsu and Lauly Li / Staff reporters, with CNA
Public-sector employees and those working in state-run businesses are to receive a pay raise next year after a freeze of more than six years, the Cabinet has announced .
The Cabinet on Tuesday finalized a plan to grant a 3 percent pay raise for government employees, public-school teachers and military personnel next year in a bid to help stimulate a similar move by employers in the private sector to boost the economy.
The Cabinet yesterday said that the pay raise would be extended to state-run businesses.
The measure is to benefit about 580,000 civil servants and teachers, as well as an undisclosed number of military personnel, Executive Yuan spokesman Hsu Kuo-yung （徐國勇） said.
State-run financial institutions plan to pay employees between 3 percent and 6 percent more next year after a salary increase of between 1 percent and 3.7 percent this year, the Ministry of Finance said.
The ministry controls a significant stake in Mega Financial Holding Co （兆豐金控）, Taiwan Cooperative Financial Co （合庫金控）, First Financial Holding Co （第一金控）, Hua Nan Financial Holding Co （華南金控）, Chang Hwa Commercial Bank （彰化銀行） and Taiwan Business Bank （中小企銀）.
Taiwan Power Co （Taipower, 台電） spokesman Lin Te-fu （林德福） said the company is to begin administrative procedures for pay increases once it receives an official notification from the Ministry of Economic Affairs.
“Taipower’s human resources department will propose a range of pay raises and the board will make the final decision. The 3 percent pay raise for civil servants, public-school teachers and military personnel will be used as a reference,” Lin said by telephone.
Chunghwa Telecom Co （中華電信）, in which the government holds a 35 percent stake, said that company chairman David Cheng （鄭優） had asked chief financial officer Harrison Kuo （郭水義） to evaluate the feasibility of carrying out another pay raise program.
The telecom in 2015 said it increased wages by NT$1,500 （US$49.91） per month and last year by NT$500 per month, with an additional NT$15,000 special bonus.
The proposed salary hike is a shelved proposal that has been reintroduced because the economy has turned a corner and started to grow, Premier William Lai （賴清德） said.
The TAIEX has stayed above the 10,000-point mark for more than 60 days — the longest period in history — showing that the economy has improved, while tax revenue is also expected to increase, Lai said.
“We believe that increasing salaries for public-sector employees could boost morale, and is a response to calls from businesses and industries for a general wage hike to stimulate the macroeconomy, which is the most important factor [of the wage hike],” Lai said.
Lai said he made the decision after former premier Lin Chuan （林全） determined in July that a wage hike was improbable, as it would overburden government finances.
Lai said he discussed the wage hike with President Tsai Ing-wen （蔡英文） days after taking office, as it was one of the major policies to be discussed ahead of the new legislative session set to being on Friday next week.
The pay hike is expected to cost the central government NT$18 billion, but it will not need to borrow the funds, Hsu said.
Security transaction tax revenue is expected to increase by NT$7 billion due to a boom in the stock market, while the government could save about NT$11 billion through budget cuts, Hsu said.
Hsu said the increment was put forward after careful analysis of government finance.
The previous public-sector employee pay raise was in July 2011.
Chinese National Association of Industry and Commerce chairman Lin Por-fong （林伯豐） said the 3 percent hike was insufficient.