Employment Passes

Mr Arthur Fong asked the Deputy Prime Minister and Minister for Manpower for the past eight years how many employment passes had been annually issued for the financial services sector and which were the top three countries that the pass holders were from.

Mr Yaw Shin Leong asked the Deputy Prime Minister and Minister for Manpower (a) whether the Ministry is taking steps beyond the Enhanced Employment Pass Framework in moderating the number of EP/S passes issued, given the expected slowdown in the economy in 2012; and (b) whether further tightening of the Employment Pass criteria to protect Singaporeans' jobs will be considered if the economy worsens beyond expectations.

The Minister of State for Manpower (BG [NS] Tan Chuan-Jin) (for the Deputy Prime Minister and Minister for Manpower): Mr Speaker, Sir, if I may take Question Nos 7 and 8 together?

Mr Speaker: Yes, please.

BG [NS] Tan Chuan-Jin: The number of new Employment Passes (EPs) issued annually for foreign professionals in the Financial Services industry has averaged 4,500 in the last decade, rising from 3,300 in 2001 to 8,700 in 2010. The net increase of EP holders in the Financial Services industry over the decade was 9,600, taking into account the outflow of EP holders. Local employment in the financial services sector also grew by over 66,000 over the 10 years to December 2010, as businesses expanded in Singapore.

The Government has taken significant steps in recent years to moderate the demand for foreign manpower. We have phased in the measures, so as to give time for businesses to adjust, upgrade productivity, and rely less on manpower additions to achieve business growth. For approval of EPs, we have introduced higher qualifying salary requirements since July 2011, followed by further measures that will be effective from this month, that is, January 2012. The revised salary criteria have been accompanied by the tightening of educational criteria. The changes are aimed at ensuring that EP holders recruited are of a good calibre, are able to contribute effectively to our economy, and to preserve a level playing field for Singapore professionals (PMEs).

To complement these measures, the Tripartite Alliance for Fair Employment Practices (TAFEP) recently released revised guidelines on Fair Employment Practices in October 2011. The guidelines, which aim at preserving a strong Singapore core in our workforce, call for employers to make reasonable efforts to attract and consider Singaporeans for job positions on merit, and to train them and develop their potential and careers. The efforts should include working with educational institutions, career centres and recruitment agencies to attract and recruit Singaporeans.

The impact of all these measures taken together will emerge over the coming months and the coming years. We will monitor the impact carefully so as to ensure the right balance, just as we will continue to remain aware, to listen out to the feedback from the various communities. In particular, our policy changes must not end up hurting the interests of the very same Singaporean employees we are trying to help. Without reasonable access to foreign manpower, both local and global companies will not find it viable to operate out of Singapore, or curb their expansion here. This will lead to the loss of good jobs for Singaporeans at all levels. Local SMEs with the potential to expand will also be hampered if they cannot find enough or the right manpower for their operations, including S Pass and EP holders.

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Hence, each time we make changes to improve the foreign workforce profile, we need to monitor the overall economic climate and we have to take pains to ensure that we do so in a sensible and calibrated manner, and provide companies with active support to upgrade their operations and train up their people. We will keep this approach of taking measured steps to manage the growth of the foreign workforce, so that employers are not forced to cut back on good jobs for Singaporeans.

Mr Yaw Shin Leong (Aljunied): I thank the Minister of State for his reply. During the last crises in 2008 and 2009, retrenchment figure was high but the stock of EP and S Passes increased by 54,000, a 20.8% total net increase. Can the Minister of State clarify if this enhanced Employment Pass framework is any different from the previous framework in buffering resident PMETs against job loss during an economic downturn?

BG [NS] Tan Chuan-Jin: I thank the Member for the question. The revised framework is different from the framework before. The framework, currently as proposed, aims at a few things: one, we remain committed to having an open and diverse workforce, but we do recognise that given where we are today, we need to moderate that overall growth. The measures are put in place to tighten both the quality of the foreign workers and foreign talent coming into Singapore. We are also putting in place measures so that it levels the playing field. These measures will take effect in the coming months and years. But there are many other measures that are put in place to facilitate the maintenance of employment. For example, in the 2008 crisis, we put in place various measures including the Jobs Credit Scheme which was very significant. In fact, I think we had done fairly well in making sure that despite the very serious economic crisis globally, we had managed to maintain good employment numbers. Employment did go down but in the overall context of things, we maintained fairly good employment numbers, and kept unemployment relatively manageable. Some of the measures put in place had enabled the economy to grow. The important thing is that having economic growth allows jobs to be created and to be maintained for our people.

Going forward, we would continue to track carefully. We are aware that the economic circumstances are becoming difficult, and we are looking at various measures that were put in place previously and at other new measures that might be put in place. In due course, we will announce them when the time is right and when it is necessary.

Mr Arthur Fong (West Coast): Mr Speaker, two supplementary questions. The Minister of State did not reply to the second part of my Parliamentary Question about which top three countries the EP holders came from. Secondly, would the Minister consider some inter-Ministry liaison or assessment when approving such EPs? For example, in the financial sector, we would need to consider if such individuals are qualified not just on the basis of the salaries and educational qualifications. We can see that the financial markets in Europe are currently experiencing job losses and we do not want that to affect the employment of Singaporeans here.

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BG [NS] Tan Chuan-Jin: I thank the Member for the questions. I do realise that I did not answer the second part of his question. We do not talk about those specific countries where some of these foreigners come from. At present, we do not divulge those details.

His second question is a relevant one, about the different Ministries exchanging information to make sure that we are taking in the right people. Salaries and educational qualifications are two important criteria but there are also other factors that we use in our assessment. However, we are mindful of the feedback and will take that into consideration when considering the people that we bring in. It might be useful to note that even as we grow and bring in some of these foreigners, it has allowed – and I think it is important to emphasise this – our companies to do well and to be able to grow, and that growth has also enabled Singaporean jobs to be created.

For example, our manpower framework allows companies in Singapore to build up the skills and expertise of their teams. This has attracted investors and businesses. Correspondingly, professional jobs for residents have also increased, for example, from 419,900 in 2001 to 647,800 in 2010. In many ways, bringing in some of these PMEs has allowed PME jobs to be created for Singaporeans as well.

Mr Yaw Shin Leong: Sir, I thank the Minister of State for the reply. The Government has always touted foreign labour accessibility as a key competitive advantage that creates jobs for Singaporeans. But has this accessibility come at the expense of retrenched Singaporeans? Mr Eugene Wong's story in The Straits Times of 16 December 2011 showed the general trend of retrenchment but it is not directly related too much to this foreign labour market accessibility.

BG [NS] Tan Chuan-Jin: Sir, having an open and diverse workforce is important for Singapore, both for local companies and foreign companies. Local companies can choose to stay here or to go somewhere else where perhaps costs are cheaper and more competitive. In the same way, foreign companies can choose to go to other countries as well because it is very competitive. However, many of our companies do base themselves here and grow from Singapore to beyond, and many companies actually do come to Singapore to invest, setting up regional headquarters and so on. All these create jobs for Singaporeans. This is something we are mindful of. It allows the economy to grow but at the same time we also recognise that there are externalities. So, depending on the situation, we would have to moderate, as we are doing now, the growth of the foreign workers and talent in Singapore.

As retrenchments take place, a range of people will be retrenched. We track that carefully. On balance, what we are quite particular about is that economic growth and ensuring companies grow and do well will continue to allow jobs to be created for Singaporeans. And our unemployment and employment numbers do show that these have a significant effect. We need to be mindful to make sure that we do not become excessively rigid. It is a very fine balance to ensure that correct policies are put in place so that these companies remain competitive and, at the same time, can make sure that Singaporeans remain the core of the workforce.

Mr Speaker: Mr Zainudin. Last question.

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Mr Zainudin Nordin: Sir, I am very happy that the Minister of State mentioned about the quality and qualifications of the Employment Pass holders. I would like to ask a few follow-up questions. Are we producing enough professionals for the financial sector and what quality of graduates are we producing to ensure that we meet the needs of the financial sector? What is the current ratio of foreign professionals versus local professionals in the financial sector?

BG [NS] Tan Chuan-Jin: I would like to thank the Member for the question. I do not have the specific numbers in terms of the breakdown. What we do know is that the financial industry is growing. The industry has grown quite significantly, and local employment in financial services, as I mentioned earlier, also grew by 66,000 over the last 10 years. This is quite considerable. This is also reflected by the choices that students take up in the universities. I do not have the specific numbers but we do see more students becoming interested and taking up business modules. In terms of the specific figures, I will get back to the Member on the breakdown.