Due to a budget deficit, the Vietnamese government has decided to postpone submitting a plan to raise the regional minimum wage to the lawmaking National Assembly for approval until next March.

The decision was made at the monthly meeting of the cabinet under the chair of Prime Minister Nguyen Tan Dung on Thursday.

According to statistics of the Ministry of Finance, the country’s budget deficit, as well as public debts, has increased rapidly in recent years. 

The ministry’s recent estimates show that central budget revenue in 2015 will likely be VND31 trillion (nearly US$1.4 billion) lower than targeted.

However, thanks to a budget surplus at the local level, expected to be close to VND47 trillion ($2.12 billion), the country will have an overall budget excess of VND16.4 trillion (roughly $740 million), the ministry said. 

The central budget deficit has mainly been caused by the decrease in world crude oil prices, while overspending and tax reduction have contributed to the deficit, according to the report.

Therefore, after discussion, the cabinet decided to delay submitting its minimum wage rise plan to the National Assembly until March 2016, pending an improvement in the central budget balance.

On September 3, the Vietnam General Confederation of Labor (VGCL) proposed that the government increase regional minimum wages in 2016 by at least 14.3 percent to improve the life of laborers. 

Presently, the monthly minimum wages for Zones 1, 2, 3 and 4 are  VND3.1 million ($138.9) VND2.75 million ($123.3) , VND2.4 million ($107.6) and VND2.15 million ($96.3). Zone 1 covers the urban parts of Hanoi and Ho Chi Minh City; Zone 2 is applicable to the rural areas of Hanoi and Ho Chi Minh City, along with the urban regions of Can Tho City, Da Nang City and Hai Phong City; Zone 3 comprises provincial cities and the districts of Bac Ninh Province, Bac Giang Province, Hai Duong Province, and Vinh Phuc Province; and Zone 4 consists of the remaining localities.

According to the VGCL, the 2015 minimum wage rates, which are 14.3 percent higher than those in 2014, only cover 78-85 percent of the minimal living costs of employees.

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