The National Assembly (NA) has agreed an increase 7 per cent for annual base salary, pensions, and preferential subsidies for people with meritorious service given to Vietnam’s revolution.

This approval has been part of Vietnam's five-year resolution on financial planning for the 2016-2020 period with 86.64 per cent of NA votes in favor.

The base salary is currently stipulated in Decree No. 99/2015/QH13 and stands at VND1.21 million ($54). The minimum regional salary is VND3.5 million ($156) in Region I, VND3.1 million ($139) in Region II, VND2.7 million ($121) in Region III, and VND2.4 million ($107) in Region IV, under Decree No. 122/2015.

Comparing the base salary, which is used to calculate the salaries of State officials, and the regional minimum salary for non-State employers, Mr. Bui Sy Loi, NA delegate for Thanh Hoa province, expressed concern over whether the base salary can meet the minimum living standards of State officials. Though the increase to the base salary is only modest, Mr. Loi also estimated that an increase of 7 to 8 per cent would cost the State budget an additional VND6.6 trillion ($295.5 million).

Any increase, he went on, would only be a temporary solution and not represent real reform to the salary mechanism. He suggested that retirees and people that gave meritorious services to the revolution be excluded from any increases.

He expects the government to research salary reform because increases motivate workers to enhance productivity.

State officials in the education sector total about 1.3 million, in healthcare about 300,000, and in other sectors from 1.6 to 1.7 million, Mr. Mai Duc Chinh, Deputy Chairman of the Vietnam General Confederation of Labor (VGCL), has estimated. The government pays the salaries of State officials in remote areas while local budgets are used to pay officials in other areas.

In August the National Wage Council approved a plan that was submitted to the government on increasing the regional minimum wage by 7.3 per cent in 2017. The minimum wage in Region I will increase VND250,000 ($11.2), or 7.1 per cent, in Region II VND220,000 ($9.86), or 7.1 per cent, in Region III VND200,000 ($8.9), or 7.4 per cent, and in Region IV VND180,000 ($7.9), or 7.5 per cent. The average increase in the four regions is VND213,000 ($9.5), or 7.3 per cent. 

Before the final decision of the Council was made, the Vietnam Chamber of Commerce and Industry (VCCI) suggested the increase be from 4.5 to 5 per cent but then accepted a 6 per cent increase. A textile company member even recommended the minimum wage not be increased in 2017.

VGCL, meanwhile, agreed to reduce its suggested increase down to 10 per cent from the original 11.11 per cent.

VN Economic Times