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Wage reform: Focus on streamlining workforce

09:21 | 25/11/2017

VCN- On 22 November, 2017, Deputy Prime Minister Vuong Dinh Hue, Head of Central Steering Committee for reform of Wage, Social Insurance and Incentives for people with meritorious service had a working session with Ministry of Finance to discuss the development of specific contents of the project on the reform of policies on wage and social insurance.

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The working session

The working session was attended by Minister of Finance Dinh Tien Dung, leaders of Vietnam Social Insurance, Ministry of Home Affairs, Ministry of Planning and Investment and representatives of Committee on Social Affairs and Finance-Budget Committee of the National Assembly.

According to Deputy Prime Minister Vuong Dinh Hue, Vietnam’s Government is developing the project on the reform of policies on wage and social insurance. This is a difficult field and large scale. The project is applied to the public sector, sectors in State organizations, manufacture sectors (State-owned enterprises and private enterprises) related to policies of social insurance which is one of key policies on social welfare. This is also a sensitive issue related to almost all people in the age of working and retirement.

Therefore, the Steering committee desires to update information and comments of relevant agencies such as Ministry of Finance and Vietnam Social Insurance to find the most feasible resolutions for the project and assist Party and State in promulgating policies on reform of wage and social insurance of Vietnam in accordance with market signals.

At the working session, Mr. Bui Sy Loi, Vice Chairman of National Assembly’s Committee on Social Affairs stated that the special subject which was developed by the Ministry of Finance for the project on the reform of policies on wage, social insurance was quite specific, useful and important. However, Mr. Bui Sy Loi also said that in order to comprehensively implement wage reform, the most difficulty is increasing 5% of annual State revenue and saving 10% from annual expenditure in administrative agencies. Hence, the project needs to be considered carefully to meet the target.

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“The set issue for the Ministry of Finance is the development of source. I think that the source will be taken from reducing expenditure for a wage from State budget of public non-business units. The important thing is reducing State’s workforce. In addition, social welfare also is better, which mean that expenditures for this must be reduced. The reduction will be paid for wage” Mr. Loi said.

Agreeing with this opinion, Mr.Tran Quang Chieu, Standing Member of National Assembly’s Finance-Budget Committee also said that only the Ministry of Finance could not identify the source for reform. First of all, the administrative apparatus needed to be restructured and streamlined. This was the most basic source.

Commenting on the project, Deputy Minister of Home Affairs Tran Anh Tuan affirmed “In my opinion, It is required to understand that wage policy reform is not the project to increase wage but is to reform regulations, policies and to overcome limitations such as average wage and enhance management of wage and income. If focusing on “source”, we will meet difficulty in the development of the project. In my opinion, when the state budget is facing with current difficulties, if depending on revenue, we will not implement”.

Ms. Nguyen Thi Minh, Deputy Prime Minister of Finance, General Director of Vietnam Social Insurance said that currently, some incomes were paid for the employee but were not considered as a wage. The initial solution is considering these amounts as “wage” and recalculating amounts rising from revenues and expenditure savings.

Closing the working session, Deputy Prime Minister Vuong Dinh Hue proposed that relevant ministries and sectors must develop special subject on current wage income and development of source for wage policy reform. The Deputy Prime Mister also assigned the Ministry of Home Affairs to be in charge of developing contents on wage reform applicable for civil servants and officials and armed forces; The Ministry of Labour, Invalids and Social Affairs to be in charge of manufacture sectors (State-owned enterprises and private enterprises); and The Ministry of Finance to be in charge of development of “source” for reform.

“Developing the project on wage reform is not only to find the way to raise wage level but also review opinion, direction and identify shortcomings such as average, equal policy and allowances more than salary. It is required to take the target of clearing income outside wage into practice and pay wage under the rank and position and restructuring allowances. We must respect the objective principles and rules of the market economy" Mr. Hue emphasized.

By Thuy Linh/Ngoc Loan