Consideration is being given to raising the basic monthly wage of public servants to VND1.3 million ($58.3) next year, as recommended by a number of National Assembly (NA) delegates.

The Standing Committee of the NA is continuing its fourth session, hearing reports and providing opinions on the implementation of the State budget this year, State budget estimates, and budget allocations in 2017.

Mr. Nguyen Duc Hai, Chairman of the NA Finance and Budgetary Commission, said the proposal for increasing the basic wage from VND1.21 million ($54.3) to VND1.3 million ($58.3) per month, or seven per cent, is relevant in the context of higher prices and living costs. The government must, however, make suitable arrangements for funding the increase.

“Wage adjustments need to be in line with reductions in personnel, rearrangements of State administration staff, and improvements in efficiency, and be properly considered,” said Mr. Hai.

The Commission also notified the government about the possibility of requiring local and central agencies and ministries to arrange finances to fund the adjustment.

The minimum monthly salary of public servants increased to VND1.21 million ($54.3) on May 1. Since 2008 the minimum monthly salary has increased just twice, from VND540,000 ($24.2) to VND1.21 million ($54.3).

At a conference entitled “The Context and Potential for Wage Reform”, held by the Ministry of Home Affairs on October 12, the obstacles in Vietnam’s wage regime were discussed by a number of experts. The greatest obstacle identified is that the wages of the Party General Secretary and the State President are equal to the wage of an accountant.

Professor Tran Xuan Cau, former Head of the Faculty of Economics and Human Resources Management at the National Economics University, said that the monthly salary of public servants is calculated by multiplying a fixed base salary as stipulated by the government with a varying “salary coefficient” that is dependent upon an individual’s seniority and position.

He also pointed out irrationalities in the fact that most public servants pay little attention to changes in their salary, even though such changes are supposed to have a direct impact on their lives.

“The reality is that rich officials and public servants don’t care about a raise in their base salary,” Professor Cau said. “This proves that there is something very wrong with the current wage policy.”

VN Economic Times