State salaries to remain in limbo

Prime Minister Nguyen Tan Dung last week told the National Assembly that “due to state budget woes, the government has yet to find a financial source to raise minimum salary for state employees in 2013.”

Minister of Finance (MoF) Vuong Dinh Hue stated that the total cash needed for the  pay rise would be about VND60 trillion ($2.89 billion).

Under a plan the government proposed previously, which was expected to take effect on May 1, 2013, the minimum salary for state employees would be lifted from the existing VND1.05 million ($50.4) to VND1.3 million ($62.5) per month.

The MoF explained that minimum salary had been increased eight times over the last nine years, with each time seeing an increase of VND100,000-200,000 ($4.8-9.6). Thus, another pay rise would be imprudent amid the current economic decline, ministerial officials said.

However, the government’s new proposal has generated outcries from many National Assembly members and state employees.

Truong Thi Mai, chairwoman of the top policy making body’s Committee for Social Affairs, said about 22 million people in Vietnam would be affected by the pay hike deferment. They included retired people, military officers and those working in state-owned enterprises and organisations.

“The pay rise deferment will dispirit those living on this type of salary, because their life remains too difficult now. They are eagerly awaiting a  pay rise,” Mai said.

Echoing this view, Ho Chi Minh City delegate Tran Thanh Hai said the city was home to over 138,400 retired people, many of whom were earning the state-stipulated lowest pension level of VND1.03 million ($49.5) per month. Meanwhile, the average monthly living cost in the city was VND2.06 million ($99) excluding inflation.

“So, it is important that the salary should be increased as soon as possible,” said Hai, who is also vice chairman of the city’s Labour Confederation.

Tran Thi Quoc Khanh, a delegate from Hanoi said the $2.89 billion needed for the plan could be taken from the government’s restructuring of all inefficient state-owned groups and corporations, and reduction of the government’s unnecessary expenses.

“No matter how difficult it is, the government will have to augment salary to improve people’s life,” Khanh said.

The National Assembly is yet to make decision on the government’s proposal to delay the minimum salary hike plan.