Vietnam - Gov’t says can’t afford wage reform next year

VietNamNet Bridge – The Government will not allocate any funding for the much-awaited wage reform next year as the State budget is facing a shortfall, Minister of Finance Vuong Dinh Hue said on Tuesday, Oct 16.

The Finance Minister told the National Assembly Standing Committee at a meeting that if the wage reform was to be deployed as scheduled, the State would have to spend an additional budget of around VND60-65 trillion next year.

The meeting was convened by the NA committee to hear the Government’s report on budget estimates and the budget allocation plan for next year.

According to Minister Hue, under the wage reform progress, the minimum wage would be increased from VND1.05 million to VND1.3 million per month from next May.

However, due to difficulties in budget collection anticipated for this year and next  and in order to maintain the budget balance, the Government will not allocate budget for the wage reform.

Truong Thi Mai, head of the National Assembly Committee for Social Affairs, expressed concern over the Government’s proposal, saying that around 22 million people would be affected if the wage increase was not carried out. She suggested that the wage for laborers of businesses should be increased as planned while the wage for the State sector can be increased some time later next year.

Phung Quoc Hien, head of the National Assembly Committee for Finance and Budget, said the minimum wage should be raised by VND100,000, from VND1.05 million to VND1.15 million, to reduce the burden on the State budget.

NA Chairman Nguyen Sinh Hung disagreed with the Government’s plan to withhold the wage reform, urging the Government to check budget expenditures and cut what is not necessary to allow for a wage increase instead of delaying it.

However, there are many opinions agreeing with the Government’s proposal, saying that amid current difficulties, a delay in wage increase is necessary, and the minimum wage has been increased for eight times since 2003.

VietNamNet/SGT

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