Foreign Workers in Singapore

Mr David Ong asked the Deputy Prime Minister and Minister for Manpower (a) what pace will the Ministry take to tighten the quota for foreign workers in Singapore; and (b) whether a more customised approach can be taken for SMEs, especially those in the food and beverage and food manufacturing industries which are facing more problems with the foreign worker quota, foreign worker levy and attracting Singaporeans to do the job.

BG [NS] Tan Chuan-Jin (for the Deputy Prime Minister and Minister for Manpower): Mr Speaker, Sir, as part of our effort to prevent an increasing reliance on foreign manpower, especially low-skilled workers, we have been increasing the foreign worker levy (FWL) for Work Permit and "S" Pass holders progressively since July 2010. As announced previously, the levies will continue to be raised in six-monthly intervals up to July 2013.

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We have not, in fact, tightened the foreign worker quotas. What we have done, however, is to tighten the entry criteria for the various work passes to raise standards and improve quality. The Government will periodically review the need for further adjustments, while providing lead time for companies to adjust. However, this is not all we are doing to encourage companies to restructure and to reduce their dependence on labour. The more important solution is for companies to invest in productivity, innovation and in upgrading the skills of their workforce. The Government is providing full support for these productivity and Continuing Education and Training (CET) efforts.

We recognise the difficulties many SMEs face in recruiting Singaporeans. The Government has introduced specific initiatives to help SMEs re-engineer their operations and to reduce their reliance on labour. One example is the SME Productivity Roadmap (SME-PRO), a joint initiative by the WDA and SPRING Singapore, which provides a systematic, three-step approach for SMEs to improve their productivity. A dedicated portal provides SMEs access to information and resources to help them take concrete actions to raise productivity. One feature of the portal is an online productivity calculator for businesses to work out their productivity levels and to benchmark against industry levels.

In addition, SMEs can avail themselves of the numerous sectoral-based productivity initiatives that the National Productivity and Continuing Education Council (NPCEC) has rolled out in 16 industries. SMEs that are cash-constrained and require more time to phase in their productivity investments also have the option of converting part of their Productivity and Innovation Credit (PIC) into a cash payout of up to $21,000 each year. This means that small companies with lower taxable income can enjoy up to $1,750 cash grant for every $10,000 spent on the qualifying activities under the PIC to boost productivity and innovation.

The Government will also continue to work closely with our tripartite partners to facilitate the employment of local residents. For example, we have a significant untapped pool of inactive residents, especially women, who could be encouraged to rejoin the workforce if the jobs offered flexibility. The Flexi-Works! scheme offers a grant of $100,000 to help companies implement part-time or flexible work arrangements. NTUC's Women Development Secretariat also hosts regular job fairs targeted at women who are new to the workforce or who have not worked for a long time and are considering rejoining the workforce. Another local pool of potential labour that companies can tap on is the older residents. The Retirement and Re-employment Act will take effect from 1 January 2012 to provide more job opportunities for older workers who do want to work. Through the ADVANTAGE! Scheme, we offer a financial grant of up to $400,000 to help companies recruit, retain and re-employ older workers. SMEs, including those in the food and beverage and food manufacturing industries, should actively tap onto these assistance schemes to improve their jobs and workplace conditions to attract local residents to join these industries.

Lastly, I would urge business and industry associations, such as the Association of Small and Medium Enterprises (ASME) and the Singapore Manufacturers' Federation (SMa), to work closely with their members to leverage on these productivity schemes and to share the best practices because there are companies out there who are managing this transition. In fact, I just had very meaningful dialogues with both ASME and SMa over the past two months and I have found their feedback and suggestions very useful. We will continue to engage all our business associations and support their endeavours to help the smaller companies.

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Mr David Ong: I thank BG Tan for his explanation. I have also met up with these SMEs as well. I think most of them are feeling that they are being squeezed out. It is like a noose around their neck. Although they understand the rationale behind the Government's policies, they thought that the pace is a bit too quick for them. They could not find the workers to fill those jobs that were vacated from non-renewal of their foreign labour – some of them are skilled labour. For many, they are grappling now with their business survivability.

In that sense, I hope that the Government can look at customising the pace of implementation for this service industry. At the same time, for SMEs who need to relocate or re-deploy their resources, we also hope that the Ministry could also look at helping them, organise them and assist them, where appropriate.

BG [NS] Tan Chuan-Jin: Mr Speaker, Sir, those concerns raised by the hon. Member of Parliament are the same concerns – indeed, about the noose-tightening and so on, and whether the pace of introduction of these measures could be more deliberate. We are quite aware of these concerns. In the dialogues that we have had, we had shared with them our perspectives as well. We do really have a very wide range of initiatives. I think what is key, we feel, is that the associations could do a lot more. Companies could cluster together because they do share common practices. How do you share the best practices amongst them? And as an association and industry, how do you then help each other?

We have endeavoured to give lead time before these measures kick in and that is something that we will continue to do. In fact, many of these measures were made known prior to this. But I am not always sure the companies register this. One of the feedback, and we will act on this, is to make sure that we repeat these announcements quite clearly to make sure that even though the message is sent out, the receiver would hear it and understand that, because that will give them the lead time to work the transition. But we are mindful of this and we are constantly in touch with the companies. If there are measures that we can introduce or to adjust to help the transition, I think we will endeavour to do that. But an important thing to emphasise here really is that it is about helping our Singaporean companies manage this transition. The emphasis is on transitioning to a much more higher growth productivity in terms of relying on the same amount of labour or perhaps even a reduced number of workers. At the same time, ensuring that the SMEs continue to thrive is important because they provide jobs for many Singaporeans.

Mr Yeo Guat Kwang: Sir, the Minister of State mentioned that the Ministry is tightening the criteria for bringing in foreign workers. I would like to ask whether the Ministry will consider actually setting higher skill requirements to ensure that the employers are responsible in that they are bringing in quality workers, and not just go for quantity. Instead of just tightening the criteria, would the Ministry also step up measures to ensure that abuse by the employers and the unfair recruitment practices will also be curbed?

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BG [NS] Tan Chuan-Jin: Mr Speaker, Sir, indeed, I think many of the steps that we are putting in place are aimed at increasing the quality of the foreign workers and foreign talent coming into this country, and the measures are aimed at doing that. At the same time, I think we are also mindful of fair employment practices, which is why at the moment we are undergoing consultation with the various stakeholders on some of the measures, in terms of how do we then encourage employers to employ Singaporeans. So TAFEP will follow up, for example, on allegations of discriminatory hiring practices. So, if there is information, do let us know. We will contact the employers and review the firms hiring and employment practices. Employers are indeed reminded on the importance of having procedures in place to ensure hiring on merit. So TAFEP has experience with other unfair employment practices and we believe that going down this path would yield substantive results. And I think raising awareness, as we have done so at various occasions, would also remind many companies which may not always be very conscious to be mindful of this particular approach in terms of employing Singaporeans.