State budget use is big waste, with 7,000 public cars in excess On June 15, the National Assembly Standing Committee listened to Minister of Finance Dinh Tien Dung’s report on the implementation of the Law on Thrift Practice and Waste Combat in 2015, which pointed out waste in using the state budget. According to the report, waste was typical in the construction of public works. For example, the Museum of Hanoi worth hundred millions of USD has opened for nearly 5 years but it has failed to attract visitors. The expanded Thai Nguyen Steel Plant project worth nearly $400 million is still idle after almost 10 years of implementation. The dormitory for students in Hanoi and some provinces worth hundreds of millions of USD have been abandoned by students. As for public procurement, in 2015 state agencies bought 611 cars at a total cost of nearly $30 million while the number of state cars in excess is up to 7,000. Nguyen Duc Hien, Head of the National Assembly People’s Aspiration Committee, said that the use of public assets is an issue of public interest but the government report did not show all the shortcomings, particularly the use of state vehicles at government agencies. Nguyen Thanh Hai, Chairwoman of the National Assembly Committee for Culture, Education, Youth, Teenagers and Children, said there must be measures to handle and rectify waste in using public assets, specifically the use of public cars and public spending. National Assembly Vice Chairman Uong Chu Luu said the government must name the state agencies that cause waste for the state budget, not mentioning the waste in general. NA deliberates on budget spending The National Assembly Standing Committee has approved the setting aside of VND2.1 trillion ($94.14 million) for reorganizing the State salary system, paid for by using some of the VND5.46 trillion ($244.77 million) in unused State revenue from 2015. The decision on using the revenue is in response to a proposal from the government on increasing basic State salaries, pensions, and assistance to military and police veterans by 5-7 percent a year. Minister of Finance Dinh Tien Dung said the increase will bring the percentage of the budget expenditure used for salaries to 64 per cent. The allocation comes at a time when Vietnam is struggling to handle its budget deficit, which was over VND66 trillion ($2.95 billion) in the first five months of the year, which is quite high given that taxes and other State revenue are falling, according to the General Statistics Office. In 2015 basic State salaries increased by 8 per cent, with average salaries for workers at State-owned enterprises (SOEs) being the highest, at VND7.04 million ($331), according to Ms. Tong Thi Minh, Director General of the Department of Labor and Wages at the Ministry of Labor, Invalids and Social Affairs. The use of State revenue for increases to the basic State salaries obviously adds to the burden on State revenue spending on mass organizations or State-sponsored mass organizations, also known as socio-political organizations. According to the latest report from the Vietnam Institute for Economic and Policy Research (VEPR), the budget for these organizations in 2014 was VND1.261 trillion ($57.8 million), double the figure in 2006. “Support increased from VND781.3 billion ($34.9 million) in 2006 to VND1.8997 trillion ($85.08 million) for all State mass organizations, accounting for about 1.1 per cent of the total State budget for central ministries and central agencies in 2014,” VEPR wrote. This is equivalent to the amount of expenditures on the Ministry of Planning and Investment, the Ministry of Science and Technology, and the Ministry of Industry and Trade Moreover, according to analysis from the Bank for Investment and Development of Vietnam (BIDV), budget expenditures in recent times have been unstable and have led to inefficiencies, as expenditures for operating activities is growing 18.44 per cent per annum while the expenditures on development activities is only 4.8 per cent per annum and falling. Of the remaining VND5.46 trillion ($244.77 million) in unused revenue from 2015, VND2.14 trillion ($95.93 million) will be used to cover the budget deficit, while VND1.12 trillion ($50.20 million) will go to cities and provinces earning higher revenue than planned, and VND88 billion ($3.94 million) will be reinvested in localities. SOE divestment to support poverty reduction While the use of unused revenue from 2015 has been decided, the VND10 trillion ($448.30 million) earned from SOE divestment is still up for discussion by the NA. Minister Dung has proposed that VND4 trillion ($179.32 million) be used to further tackle poverty, explaining that few sources are available for this important mission. Another VND6 trillion ($268.98 million) will be used for development expenditure, of which VND4 trillion ($179.32 million) will be used as reciprocal capital in key ODA projects while VND2 trillion ($89.66 million) will be used for saline intrusion projects in the southern region and the central highlands. A final decision on the use of the VND10 trillion ($448.30 million) from SOE divestment is still to come from the NA. VNN/VET