ECONOMIC DOWNTURN AND FOREIGN MANPOWER

ECONOMIC DOWNTURN AND FOREIGN MANPOWER: 7.

Mrs Josephine Teo asked the Acting Minister for Manpower (a) how has the economic downturn impacted the number of foreigners in the workforce; and (b) whether the Ministry will review the need to fine-tune our policies on foreign manpower in light of the downturn.

Mr Gan Kim Yong: Sir, with the recession and falling demand for workers, the number of foreign workers will naturally go down. Foreigners' share of redundancies in 2008 was roughly in line with the proportion of foreigners in our workforce. The impact of foreign workers is likely to be felt more in sectors like manufacturing than in other sectors like construction which still has several projects on hand.

As I mentioned in Parliament during the Committee of Supply (COS) debate, MOM will fine-tune our regulatory framework to improve the skills and quality of our foreign workforce. I mentioned that we will raise the criteria

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for S Pass to improve the quality of S Pass workers coming here. We have also reviewed the qualifying criteria for skilled work permit holders to ensure that only better skilled and better qualified workers will benefit from the lower tier of levy for skilled workers. We will brief the various industries on these changes.

Sir, faced with the downturn, some may think that by sending one foreign worker home, one more job will be created for Singaporean workers. This is not necessarily the case. Sending foreign workers home may mean losing the business altogether and all the Singaporean jobs along with it. Instead, it is far better to help Singaporean workers become more cost competitive and resilient so that they are more attractive to the employers and they can take advantage of the opportunities still available. The Government's assistance has been significant. The Resilience Package, which includes SPUR, Jobs Credit and WIS Special Payment, will help companies cut costs, remain viable and save jobs. It will help Singaporean workers to re-skill and up-skill so that they are better able to retain their jobs and to find new jobs. It will also build new capabilities in our economy to prepare for the recovery.

Sir, in summary, even as we address the short-term challenges of the downturn, we should not undermine our competitive advantage of a flexible labour market. Singapore has to remain an attractive place for businesses in order to retain those which are here and to continue to attract new investments and bring in more and better jobs for Singaporeans.

Mrs Josephine Teo (Bishan-Toa Payoh): Mr Speaker, Sir, I thank the Minister for his explanation. Non-Singaporeans comprise about one-third of our workforce and

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as the Minister has acknowledged, job losses have mainly come from the manufacturing sector where the proportion of non-Singaporeans in the workforce is proportionally higher, so I would have expected that redundancies attributed to non-Singaporeans would be proportionally higher than one-third. This does not appear to be the case. Could the Minister please explain why?

Just two more questions. One is on the tightening of the S Pass criteria. Could I ask the Minister whether he would also consider not just tightening the criteria but also looking at the level? In other words, looking at the quota that is being allowed under S Passes, I would like to know whether the number of S Pass holders in Singapore has been lowered proportionally as our economy has shrunk.

Mr Gan Kim Yong: Sir, let me thank the Member for the questions. The proportion of foreign workers versus local workers being retrenched or being made redundant depends to a very large extent on the sectors that are affected, as Members have pointed out. In particular where services and banking sectors are concerned, I think by and large they are manned by local workers and therefore whenever these sectors are affected, we tend to see local workers being affected. In the manufacturing sector, for example, we see a mix of local and foreign workers. We also have to take into consideration that for some of these foreign workers, their contracts were not renewed. Redundancy only takes into account contracts that are terminated prematurely. So we have to take all these factors into account. I would advise Members to take these numbers with a pinch of salt, and try to understand the factors that are affecting retrenchment process rather than looking at the numbers coldly.

Secondly, with regard to the question on foreign worker quota, as I mentioned in

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my reply, it is important for us to ensure our economy remains robust, vibrant and flexible so that we will continue to attract new investments. It is important for us not to send the wrong signal to the investors,otherwise it will affect our long-term cost competitiveness and attractiveness for foreign investments. I would rather look at how we can help Singaporeans become more competitive rather than to stop the foreigners from coming. We have two choices. I think the approach to help Singaporeans is more effective. We have done so through Jobs Credit, we have done so through the SPUR programme and by helping Singaporeans become more attractive, more employable, this will enhance their employment opportunities. This not only will help us in the short term during the recession, it will also build resilience and capability for the economy in the long term within our local workforce. So, that has been the approach that we are looking at.

With regard to the specific question on S Pass numbers, I think the growth in S Pass numbers is slowing down in line with the economy. As I mentioned in my reply, if the economy continues to slow down, the overall number of foreign workers will come down.

Mr Siew Kum Hong (Nominated Member): Sir, I have a similar supplementary question with regard to work permit holders.

I would like to ask the Acting Minister how many new work permits have been issued in the past few months, given that there are so many stories of foreign workers already here on work permit not having work or not having enough work. Why are new work permits still being issued?

Mr Gan Kim Yong: Mr Speaker, Sir, in response to the question, the overall number of foreign workers including work

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permit holders will be released on a quarterly basis. The number will be available sometime in April for the first quarter.

With regard to the number of foreign workers here who have no jobs, I think I have answered that parliamentary question (PQ) sometime ago. The number of foreign workers that have employment disputes in Singapore remain very small compared to the overall size of the foreign worker population in Singapore. It constitutes about 0.4% – I am recalling from memory – 0.4% of total foreign worker population in Singapore. Therefore, the conclusion is that overall, the vast majority of foreign workers who are working in Singapore are productively engaged. They do have work and they are paid according to their contracts with their employers.

There is a small number of workers who have employment disputes – the Ministry will do what we can to help them resolve their disputes. We do expect that this number to grow over time given the economic slowdown, just like Singaporean workers who may face retrenchment problems and we have just answered the earlier question on the foreign workers who may have to be released or made redundant. So, increasingly we do see an increasing number of foreign workers who may not have jobs going forward. Some of the contracts may have been terminated or may have been delayed, or some of the new contracts, new projects may not have commenced. So, I think we have to expect that to happen. What is important for us is to ensure that the workers who encountered such problems should approach the Ministry and we will help them wherever we can.

The employers should continue to act responsibly. If they are no longer able to support the foreign workers because they have lost their contracts or the contracts have been terminated, I think these employers will then have to repatriate

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these workers after settling all the salary issues and employment issues. So going forward, we will continue to see volatility in the labour market, some sectors will be doing better than the others and we will monitor the situation carefully and, if necessary, we will come out with additional measures to help Singaporean workers.

Mdm Halimah Yacob (Jurong): Sir, whilst I understand the Minister's rationale not to erode our competitiveness, especially for the export-led sectors like manufacturing and, therefore, not to review the allocation policy between local and foreign workers, I would like to ask the Minister's comments with regard to the non export-led sectors, the non tradeable sectors, whether there is scope to review the current allocation criteria, especially restaurants and other services.

Mr Gan Kim Yong: Sir, I think from the Ministry's point of view, we have to be careful in micro-managing our overall manpower policy. It is important for us to look at the manpower policy with an overview so that the various quotas are imposed on various sectors. If we start to micro-manage each different business, each different service, each different industry or company, I think we will run into many difficulties and problems, and there will also be a lot of abuse and leakages in between the different businesses because companies are not well defined.

So, I think it is important for us to maintain overall sectorial control in the regulation of foreign manpower quota system. At the same time, we also have to step up enforcement efforts which the Ministry is doing to ensure compliance to our regulatory system and to make sure that our overall framework of foreign manpower management will not be

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undermined by unscrupulous employers. Sir, I think that is an important element of our enforcement.

Mr Speaker: Mrs Teo, last question. One question only.

Mrs Josephine Teo: Thank you, Mr Speaker, Sir. I would just like to clarify that I am not suggesting that we target non-Singaporeans for redundancies and tweak our foreign manpower policy in such way as to discriminate against companies who legitimately bring talents to grow their businesses. The Minister did say that the growth in the S Pass holders is slowing down, which suggests that it is still positive growth. In this economic climate, may I ask the Minister, would this not be a cause for concern?

Mr Gan Kim Yong: Sir, I think some of the growth came from sectors where there is still growth. In fact, there are also opportunities for Singaporeans in these sectors. So, I think it is important for us to focus on how to help Singaporeans capture these opportunities. Through SPUR we will be able to equip our Singaporeans with the necessary skills and it is also important for us to ensure that while we continue to be flexible in our labour market, the quality of our workforce will continue to be upgraded.

We have introduced SPUR to help local workers to upgrade and we want to tighten the criteria for the foreign workers so that the foreign workers' quality will also be upgraded in line with the overall quality.

To answer her question, there is still growth in the S Pass overall numbers but I think going forward, with the economy continuing to slow down, we expect the numbers to come down as well.

Mr Speaker: Mdm Halimah, last question. No, next question, not last question.