Tuesday, December 6 2016

VietNamNews

NA adopts 2016 budget with forecast deficit at 5% of GDP

Update: November, 12/2015 - 10:27
Lawmakers approved a resolution on State budget estimates for 2016 with a majority of votes yesterday. — VNA/VNS Photo Nguyen Dan
HA NOI (VNS) — Lawmakers approved a resolution on State budget estimates for 2016 with a majority of votes yesterday.

Accordingly, the budget revenue is projected at VND1,019 trillion (US$45.9 billion), while total spending will be VND1,273 trillion ($57.3 billion), resulting in a deficit of VND254 trillion (nearly $11.3 billion), equivalent to 4.95 per cent of GDP.

The resolution calls on the Government to implement a tight fiscal policy together with monetary policy in order to support production and business, continue stabilising the macro economy, control inflation, and ensure higher economic growth than in 2015.

Attention must be paid to intensifying supervision over and transparency of budget use, especially in the fields prone to corruption and wastefulness, cutting down unnecessary and ineffective expenses, and strengthening inspections to limit tax losses and prevent smuggling and trade fraud.

According to the resolution, from January 1, 2016, the monthly pay for people with retirement pensions of less than 2 million dong and pre-school teachers who worked before 1995 will be stipulated as the National Assembly's Resolution No.78/2014/QH13 issued on November 10, 2014.

Meanwhile, the minimum wage for public servants and those working in armed forces will be raised to VND1,210,000 per month from the current VND1,150,000. Retirement pensions and allowances for policy beneficiaries will maintain an 8 per cent increase, the same as in 2015.

Next year, VND60 trillion ($2.7 billion) worth of Government bonds will be issued to invest in projects using Government bond capital decided by the legislature.

Vice Chairman of the NA Committee on Social Affairs Bui Sy Loi attributed the wage increase of 5 per cent amid current budgetary difficulties to the great salary reform efforts of the government.

The government should come up with a feasible solution for keeping inflation in check to prevent a negative impact from the wage increase. It is also imperative to revamp the administrative apparatus and downsize the number of incapable staff so as to boost salary reform more effectively in line with the principle increasing our productivity, Loi said.

Deputy Tran Hoang Ngan of HCM City said this wage increase was in line with the Government's road map of wage increases. The NA's decision to adjust wage increases was quite suitable with the current situation.

Deputy Bui Duc Thu of Lai Chau said that in the current economic situation, some labourers and low-income earners have to deal with an extremely unstable life. Therefore, wage adjustment was very essential and urgent. Thu attributed the slow road map of wage increases to the difficulties in budget balancing in recent years. It can help increase wages for retied people and very low-income people only.

A few months ago, Viet Nam's National Wage Council has voted for a 12.4 per cent minimum wage increase in 2016. According to the Ministry of Labour, Invalids and Social Affairs (MOLISA), increases will also take place in 2017.

In 2015, the minimum wage across Viet Nam was increased by 13 per cent to 15 per cent to VND2.15 million to VND3.1 million ($96 to $138).

MOLISA's "Minimum Wage Adjustment Road Map" to 2020 suggests that the minimum wage in 2020 will be around VND4.8 million ($213) in Region One and VND3.4 million ($151) in Region Four.

Viet Nam has a four-tiered minimum wage scheme based on location. Region One, which includes Ha Noi, Hai Phong and HCM City, has the highest minimum wage. Region Four, which includes the least developed parts of Viet Nam, has the lowest.

Every October, enterprises have to propose a plan to raise wages for the next year. For its part, the Government has to decide on it no later than November so that enterprises can make their financial plans accordingly. — VNS

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