Minister's salary can increase dramatically by more than 33 million VND

The new salary policy will be applied uniformly to cadres, civil servants, public employees, and armed forces in the entire political system from 2021, with the lowest level equal to the average lowest salary in the business sector.

Accordingly, the project drafting committee proposed two specific options.

Option 1Expand the salary relationship from 1 - 2.34 - 10 as present to 1 - 2.68 - 12 from 2021. Accordingly, the lowest salary of civil servants in the new salary table (corresponding to coefficient 1.86 - intermediate level in the current salary table) is 4.14 million VND, an increase of 11.3% compared to 2020. While the current corresponding salary calculated according to the basic salary increased to 1.39 million from July 1 is only nearly 2.6 million VND.

The salary of a level 1 specialist (corresponding to coefficient 2.34 - current university degree) is 5.96 million VND, an increase of 27.4% compared to 2020. Meanwhile, the current equivalent salary is just over 3.25 million VND.

Notably, the salary of a level 3 senior expert (corresponding to the current coefficient of 10) is 26.7 million VND, an increase of 33.5% compared to 2020. Meanwhile, the current corresponding salary is only 13.9 million.

Option 2increased more strongly with the expansion of the salary relationship from the current 1 - 2.34 - 10 to 1 - 3 - 15 from 2021.

Accordingly, the lowest salary of civil servants still increases as in option 1 at 4.14 million, but level 1 specialists increase to 6.68 million (up 42.7% compared to 2020); level 3 senior experts increase to 33.4 million VND (up 67% compared to 2020).

With this increase, compared to the current salary, the salary of a level 1 specialist will more than double; the salary of a level 3 senior expert will nearly triple.

Speaking with VietNamNet, Mr. Nguyen Quang Dung, Director of the Wage Department, Ministry of Home Affairs, said that this salary level is calculated based on Decree 141/2017 of the Government regulating the regional minimum wage for employees working under labor contracts (enterprise sector).

Accordingly, the lowest salary for people with training level (intermediate) in the business sector is not lower than 7% compared to the regional minimum wage.

Currently, the regional minimum wage is divided into 4 regions. The lowest is region 4: 2.76 million; to region 3: 3.09 million; region 2: 3.53 million and region 1: 3.98 million highest.

The budget "cake" gets bigger, but the beneficiaries get smaller

Responding to VietNamNet, Mr. Pham Minh Huan, former Deputy Minister of Labor, Invalids and Social Affairs, said that the project to propose a salary increase roadmap from 2021 is to raise public sector salaries closer to those of the business sector, following the market.

A rough calculation of the lowest salary between the business sector and the public sector currently shows a large difference. For example, a university graduate entering the public sector with a salary of 2.34 multiplied by the base salary of 1.39 million is only about 3.2 million, while in the business sector, the common figure is from 6-8 million.

This salary is equivalent to adjusting the salary of a level 1 specialist to 6.68 million as proposed in option 2.

“So, is it true that the current public sector salary is only half of that of the business sector?”, Mr. Huan analyzed. According to him, if we want to reach the lowest average level of the business sector by 2021, the public sector salary must double compared to the current level.

Commenting on the salary adjustment of senior expert level 3, coefficient 10 to more than 33 million, Mr. Huan expressed surprise: "Compared to now, it is too sudden!".

According to Mr. Huan, a senior expert with a coefficient of 10, equivalent to the current salary of a minister, is only worth a few tens of millions. Currently, the highest salary is for the General Secretary, President, Prime Minister, and Chairman of the National Assembly with a salary coefficient of 13, about 15 million.

"That is a desire to break through, but how can we develop production and business, make people and businesses pay more taxes, and make the budget bigger, then we will have the resources to increase salaries," Mr. Huan emphasized.

“In 1993, when we were reforming salaries, the then Minister of Labor, Invalids and Social Affairs Tran Dinh Hoan only wished that by the year 2000 the minister’s salary would be 1,000 USD per month (about 20 million VND). It has been 18 years now but the minister’s salary is only about 13 million VND,” he said.

The former Deputy Minister commented that public sector salaries are related to the beneficiaries and the source of salary payment. To have a source of salary increase, there are only two ways: one is to enlarge the budget pie, the other is to reduce the number of beneficiaries, that is, streamline the payroll and streamline the apparatus. If both of these things are combined, there will be more conditions for salary increase.

Need about 140,000 - 210,000 billion VND

Speaking at the discussion session at the 7th Central Conference hallRegarding this project, Finance Minister Dinh Tien Dung said that the maximum resources for adjusting additional salaries in 2021 and 2022 are about 35,000 - 40,000 billion VND.

He said that this figure is still modest compared to the need for salary reform as proposed in the draft proposal. Therefore, it is necessary to adjust the state budget balance.

Specifically, if we want to increase salaries according to option 1, the resource demand in 2021-2022 will be about 140,000 billion VND; and according to option 2, it will be nearly 210,000 billion VND.

According to the analysis of the Minister of Finance, if we want to have resources to increase salaries according to these two options, along with focusing on allocating resources to reform salaries, while maintaining the proportion of development investment expenditure at about 26% of total budget expenditure, the deficit for these two years will be about 4.7-5.1% of GDP; ODA capital disbursement for the period 2016-2020 will exceed the plan. However, this will put public debt at risk of exceeding the 65% ceiling as early as 2021.

If so, the salary level of officials, civil servants and public employees will be improved sooner, at this time it will increase by an average of 26-42% compared to 2020. However, he is also concerned about the possibility of creating great pressure on the state budget balance and having to accept budget deficit, public debt in the first years of salary increase will be at a high level.

Minister Dinh Tien Dung proposed to study the unrealized option of simultaneously adjusting the lowest wage and the wage relationship in the same year. That is, the lowest wage can be adjusted in the first year, but the wage relationship will be calculated depending on the actual capacity of 2021.

Accordingly, in 2021, the lowest salary will be adjusted to more than 4.1 million VND, while accumulating additional resources to expand the implementation of salary relations in the following years.