WAGES TO GO UP 5% NEXT MAY

[13-11-2015] The National Assembly (NA) has assigned the Government to increase the minimum monthly salary of public servants by around 5% to VND1.21 million as from May 1, 2016. In a resolution on the 2016 State budget estimates which received approval from 392 of 435 deputies on November 11, the Government is also tasked with ensuring incomes of those whose wage coefficients are smaller than 2.34 will not be lower than the current levels.

Pensions and allowances for policy beneficiaries will increase 8% as this year.

The monthly pay for those with pensions and allowances of under VND2 million and pre-school teachers employed before 1995 will be adjusted to reach the base salary from January 1, 2016.

The Government has formulated a plan to arrange around VND11 trillion for wage increases starting next May, with 40% to be sourced from the State budget and the remainder from local funds. The central budget will partly cover salary hikes in poor localities.

In addition to revising the base salary, the resolution permits the Government to use proceeds from the sale of State stakes at some enterprises for development investment, and requires it to cut overspending and diversify terms of government bonds.

The Government can issue bonds worth a maximum of US$3 billion on international capital markets in the 2015-2016 period.

The Government is required to cut spending on conferences, seminars and festivities, restrict funds for overseas studies and field trips, limit purchases of pricey autos and equipment, closely monitor budget advances. The Government will map out a road map for cutting overspending, ensure full payments of debts that fall due and restrict the rescheduling of loans.

The NA approved spending VND40 trillion sourced from the sale of State shares at enterprises on development investment. In case there is a shortfall of budget collections, the Government can use no more than VND10 trillion from the sale of State shares at businesses to fund development investment projects.

In the resolution on budget estimates, budget revenues next year are projected at over VND1,019 trillion, inclusive of VND4.7 trillion of this year’s municipal budget funds. Meanwhile, overspending is estimated at VND1,273 trillion, causing a budget deficit of VND254 trillion, equivalent to 4.95% of GDP.

Source: The Saigon Times