Reform takes precedence
Presidential Senior Secretary for Political Affairs Cho Yoon-sun resigned from her post to take responsibility for the legislature’s disappointing delay in reforming the pension program for civil servants. Before she left, she said in a statement that it was shameful that parliament had reached a bipartisan consensus to reform the pension plan for government employees, and yet at the same time raised controversy over modifying the national pension policy, the basic allowance program for seniors and even the possibility of raising taxes.
The government and the ruling party believes Cho did not resign purely out of responsibility but to send a clear message to the legislature. Saenuri Party Chairman Kim Moo-sung said the ruling and opposition parties had inevitably reached a consensus under the National Assembly Advancement Law, which requires 60 percent support - not a simple majority - to pass bills, and that Cho bore no fault. In other words, she bowed out to apply pressure on parliament and exemplify the president’s agenda that no compromise be made when it comes to overhauling the debt-ridden pension system for civil servants.
The main opposition floor leader Lee Jong-kul, meanwhile, said the New Politics Alliance for Democracy plans to pass the pension reform bill during the May 28 regular session. But he added another condition, proposing that eligibility for state-sponsored basic allowances for senior citizens 65 or older should be expanded to 90 percent of the lower-income bracket, up from the current 70 percent.
But expanding the scope of basic monthly handouts to seniors is as difficult and costly as raising the payout ratio in the national pension policy to 50 percent from the current 40 percent. Monthly allowances demand substantial funds and a tax increase will be necessary to provide increased subsidies. The opposition, however, believes that can be solved if the wealthy, as well as corporations, are taxed more. But revising basic allowance eligibility leads to further debate on the expansion of the beneficiary scope or reducing what is considered the poverty line to selectively increase allowances.
The reform and welfare agenda needs to be put in order, and the pension system for government employees must be addressed first. After that, the task of reforming the rest of the public pension system should be handed over to an independent body for further review. Additional reforms for government employee pensions can then be discussed within the context of reforming the social and public welfare system.
JoongAng Ilbo, May 19, Page 34
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