State workers look for fatter back pocket

Ministry of Finance (MoF) statistics show that budget spending on wages and related expenses hiked constantly on-year.

In 2011 it accounted for 51.4 per cent of state budget’s recurrent expenses equalling 33.2 per cent of total spending.

In fact, spending on wages and related expenses climbed to 9.6 per cent of the gross domestic product (GDP) in 2011, against 6.7 per cent in 2000.

“Budget spending on payrolls based on GDP rate in Vietnam is fairly high compared to that in other countries, but why can’t Vietnamese state employees and officials live on their wages?” MoF’s Institute of Strategy and Policy on Finance head Vu Nhu Thang said.

MoF’s Department of Public Expenditure former head Tran Thi Thu Ha said wages just made up 44.7 per cent of labourers’ incomes in state management, defense and security sectors, according to a survey on 3,000 administrative and business-oriented organizations across the country by the General Statistics Office in 2010.

Wages accounted for 53.5 per cent of labourer incomes in education and training sector, 61.2 per cent in the health sector, and 30.6 per cent in science and technology area.

“Hence, state employees have to seek extra incomes using either state facilities and time at work or not,” said Ha, adding that state employees might consider their posts at state agencies as a means to seek extra incomes unless there were breakthroughs in wages policies.

Ha recommended split administrative and business-oriented organisations to effectively handle pay reforms.

Accordingly, in respect to administrative sector bold steps need to be taken to pare down current cumbersome headcounts. In the business-oriented sector, it is important to bring service rates closer to market rates.

“The health sector currently operates around 3,000 services, of them fee levels of 350 services were set in 1995 while those of other 2650 services set in 2006 which do not match current practices. Low pay led to negative acts by scores of health sector staff,” said Ha.

To hike wages in administrative bodies, Government Office’s General Economic Department senior expert To Manh Hao proposed trimming 70 per cent of ineffective personnel at these units, while recruiting just 20-30 per cent more to supersede the lay-offs.

“When the plan on computerising state administrative units was tabled, state agencies, sectors and localities all asserted the computer drive would help cut down headcounts. However, more people were employed in fact to operate the information technology system,” said Hao.

In light of 2012 budget estimations which was green-lighted by the National Assembly in November 2011, from May 1, 2012 minimum salaries of state employees will be hiked from current VND830,000 ($39.5) to VND1.05 million ($50) per month.

The previous salary hike for state employees was from May 1, 2011 when the minimum level was raised from VND740,000 ($35.2) to VND830,000 ($39.5) per month.