According to the salary increase plan just submitted by the Government to the National Assembly, the general minimum salary for civil servants, retired officials, and meritorious people (8 million people) will increase by 100,000 VND/month for 6 months, starting from July 1, 2013, with a total cost of about 21,700 billion VND (1 billion USD).

Speaking at the discussion session on socio-economic issues this morning, October 31, Minister of Finance Vuong Dinh Hue said: The issue of salary increase is not only a concern of salary earners but also of the Government and leaders of relevant ministries and branches.

However, to increase salaries on schedule by May 1, 2013, 60,000 - 65,000 billion VND (equivalent to 3 billion USD) is needed and 29,000 billion VND to implement the minimum salary of 1.05 million VND and the 25% public service allowance for 4 more months in 2013.

“This exceeds the budget’s ability to balance in 2013, due to low budget revenue in 2012, and the revenue increase in 2013 is also difficult due to the forecast growth rate of only 5.5%. In this situation, the Government reported to the National Assembly in May 2013 that it plans to partially implement the minimum wage or arrange salary increases for retirees, meritorious people, and officials with low salary coefficients,” said Minister Vuong Dinh Hue.

However, after discussion, the Prime Minister directed the National Assembly to consider the salary increase plan while considering the budget estimate decision in this session with the following specific plan:

Increasing the general minimum wage for civil servants, retired officials, and meritorious people (8 million people) by 100,000 VND/month for 6 months, starting from July 1, 2013, with a total cost of about 21,700 billion VND (equivalent to 1 billion USD). Of which, the central budget covers 18,400 billion VND, and the local budget covers 3,300 billion VND.

With a local budget of 3,300 billion VND, the Government will take 10% of regular spending savings arranged in the estimate submitted to the National Assembly and 50% of increased revenue for the remaining salaries in some localities.

Minister Hue added that in order to have a source to increase salaries, it is necessary to restructure budget expenditure sources and thoroughly save spending. Because the estimated domestic revenue from import and export, crude oil is at a high level, the risk is high, so the estimated revenue cannot be increased.

Accordingly, to both achieve the salary increase target and ensure the implementation of the GDP growth target of 5.5%, the Government is expected to report to the National Assembly to reduce public investment from VND180,000 billion to VND170,000 billion but still ensure it is higher than the budget deficit, issuing government bonds of VND55,000 billion - VND60,000 billion. However, according to Minister Hue's affirmation, despite cutting public investment, it still ensures the total level of VND225,000 billion decided by the National Assembly for the entire period up to 2015, while saving 10% of central budget expenditure, reducing value added tax refund expenditure, in the condition that the 2012 budget has increased revenue, it will arrange to increase this deficit.

“This is the most feasible option that can be considered. The Government is trying to control inflation at 7-8% to ensure an increase in real income for wage earners,” the Minister affirmed.

(According to Dan Tri) - LH