HÀ NỘI — Prime Minister Nguyễn Xuân Phúc has agreed to increase the monthly basic salary for civil servants from VNĐ1.3 million (US$57.2) to VNĐ1.39 million ($61.16), or a one per cent increase, starting from 2018 July.

The basic salary applies to officials and public employees working in agencies, civil-service providers in the Việt Nam Communist Party or the Government, State-funded socio-political organisations and the armed forces.

Meanwhile, the minimum wage – or in reality, the regional minimum wage, which differs if the region is urban or rural, developed or less developed – is meant as a starting point for negotiations by labourers in the private sector.

The minimum wage is usually adjusted on a yearly basis. There is no predicting when the next change in the basic salary will take place as it depends on the capacity of the State budget. 

The Prime Minister also asked all public sector organisations, from the central to local level, to plan their expenditure ahead based on this basic salary gauge. The Government also asked them to strive for increased revenue and promote workforce streamlining to ensure a balanced budget when the rise in salary starts to take effect.

In addition, according to the Government Office, to cover this increase in salaries and wages, the budget will be sourced from the 10 per cent saving from the Government’s regular expenses (except salaries for its workforce), a 50 per cent increase in collected local revenue and unused budget money from the 2017 reform process, if any.

The increase in the basic salary was approved by the National Assembly in November. It was aimed at addressing complaints related to the low and stagnant wages.

The Government has been prudent about the increases as it currently employs about three million workers, not to mention the vast number of other beneficiaries, such as pensioners and social benefit recipients.

The Government has often re-affirmed its commitment to implementing measures to trim excesses in the public workforce, frequently condemned as too large and not efficient enough.

The increase in the basic salary is part of the Government’s State budget estimate plan for 2018, which ministries, ministry-level agencies, Government agencies, State-owned enterprises and directly-controlled municipalities are supposed to execute.

According to this plan, the Ministry of Finance has the job of funnelling 100 per cent of VAT and special tax on oil and gas products from the State-owned Nghi Sơn to the State budget and 72 per cent of Việt Nam’s share from the Việt Nam-Russia joint venture’s 2018 profits to the State budget, while the remaining (28 per cent) goes towards State-owned PetroVietnam (PVN) as re-investment.

Provinces in the northern region, central region and Central Highlands are expected to spend 60 per cent and the Mekong Delta region and southwestern localities will spend 50 per cent of the revenues from the national lottery on education, training and healthcare development.

All localities have also been told to allocate at least 10 per cent of their revenue to achieve national targets on new rural development. — VNS