What the KMT Really Needs After Its Devastating Loss

This is a translation of the original 國民黨真正需要的兩箭：人事精簡、組織改造 by Luo Cheng-tsung (羅承宗), the chair of the Institute of Financial & Economic Law of the Southern Taiwan University of Science and Technology. Originally published by Voicettank. Translation by Chieh-Ting Yeh.

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The Chinese Nationalist Party (KMT)’s Taipei headquarters were in chaos last weekend. As the results of the January 11 elections came in, party chairman Wu Den-yih announced he and his deputies will resign after the central committee meeting this week.

But the next day on the 12th, high ranking members and officials couldn’t wait to blame the party for the devastating loss of its presidential candidate Han Kuo-yu. This “middle generation” of 40-50 year olds demanded “Wu Den-yih resign” “Wu Sze-huai resign” (Wu Sze-huai is the controversial retired army general with close ties to the Chinese Communist Party; he was elected as a party-list legislator) and “No Wu Den-yih in the Legislative Yuan.” These three “arrows” are supposed to reform the party from scratch and help the KMT regain its footing.

The ones calling for reform should be reformed first 

Looking at the KMT’s history, this kind of blame game isn’t new. In the presidential race on March 18, 2000, the KMT’s Lien Chan came in third, losing the KMT’s grip on power for the first time in Taiwan’s history. Immediately members forced then-president Lee Teng-hui to resign as party chairman, and Lien Chan promptly took over. When Lee left, he said “those calling for reform are the ones who need reform the most.”

Similarly, among the city councilors who attacked the party central on January 12th this year (Yeh Yuan-chih, Wang Hung-wei, Lee Ming-hsien, Lo Chih-chiang, Chang Sze-kang, You Shu-huei, Chiu Yu-hsuan, Hsu Hung-ting), was there anyone who did not happily stomp for Han Kuo-yu on stage?

When Han lost in a landslide, all of a sudden these Han cheerleaders blamed the headquarters, instead of taking responsibility for their own actions. What a shame.

Compared to the 2016 elections, the KMT actually grabbed over 5 million presidential votes and 1.5 million more party-list votes, a 45% and 44% increase respectively. Although Wu Den-yih is responsible for the unpopular candidates on the party list, the KMT did not do so poorly. If the elections were indeed a failure, the number one cause is definitely Han Kuo-yu, the most unqualified presidential candidate in history. After that, shouldn’t his cheerleaders shoulder the rest of the blame?

But the people who should be responsible are now blaming people who had even less to do with the results. Chairman Wu Den-yih is gone, but Han Kuo-yu is sitting pretty, even ditching his foreign press conference to have hot pot with his friends. Is this acceptable to our KMT friends?

Too many mouths to feed

The true problem facing the KMT is its finances. According to publicly available reporting from each political party, in 2018 the KMT has an income of NT$430 million dollars from government subsidies, donations and membership dues. They are not exactly starving to death because their assets are frozen.

Their problem is with their expenditure. According to the same data, the KMT’s personnel expenses amount to a whopping NT$1.75 billion dollars. This is why Wu, as chairman, had to bust his chops fundraising and taking out loans of $NT25 million a month. In comparison, the DPP’s personnel expenses are $NT136 million dollars, less than a tenth of the cost.

What’s the difference? 1.59 billion of the 1.75 billion goes to paying out pensions. In other words, the real cost of labor for the party is about comparable to the DPP, but about nine times more of that cost goes to people who no longer work there. This is a problem long in the making, and the party leadership knows all too well how they got there.

This is the “third rail” for the KMT. As far back as August 21, 1993, during the 14th Party Congress, party leader and head of party businesses Liu Tai-ying pointed out that of the NT$4.9 billion in expenses, membership dues only made up NT$68 million, with party-owned businesses having to make up the rest of the $4 billion plus in costs. He also criticized the fact that many members only wanted to “skim off” the party. 27 years later, the KMT is still dealing with the same problem.

United Daily News had an excellent editorial on September 9, 2016, after the party assets law was passed. Titled “KMT Must Quicken Its Transformation,” it states “the KMT’s party assets are an enormous political baggage, but it now has a great opportunity to comprehensively reform its finances, and downsize accordingly. As an opposition party that is feeding 700, 800 employees and thousands of retirees, where is its future?”

Sadly, this honest advice is not the kind of “reform” the KMT leadership prefers. The numbers tell everything. Ironically, as the KMT opposes the DPP’s government pension reforms, it is ignoring its own internal pension blackhole.

To be blunt, the current call for a change in leadership by the local councilors is nothing more than a blame game and a power grab. Certainly, Wu Den-yih has no more political capital left and is looking at a future of staying at home. But whoever takes over the reins of the KMT must understand, the problem facing the KMT is not its vision, platform, or even generational conflict; the problem lies in downsizing and reorganization.

For the past three years, the KMT thought it could solve all of its problems simply by finding a charismatic savior to win back power in 2020, abolishing the freeze on its ill-gotten assets, and going back to collecting interest off of them. After January 11, this fantasy had been effectively shut down, and the KMT can no longer avoid taking a hard look at its fundamentals.

(Feature image from Wu Den-yih’s Facebook fan page)