LEVY ON FOREIGN WORKERS

Dr Wong Kwei Cheong asked the Minister for Labour (a) whether the introduction of the $140 levy on foreign workers has increased the cost of labour in Singapore; (b) if his Ministry will conduct a survey to find out the number of companies that maintained the same basic starting wages on switching from the Central Provident Fund scheme to the levy scheme; and (c) whether it will be easier for companies to engage foreign workers under the levy scheme.

The Minister for Labour (Mr Lee Yock Suan): Mr Deputy Speaker, Sir, there are no indications that the extension of the levy scheme has increased the cost of labour in Singapore. Foreign workers constitute only a small part of the workforce for the majority of companies in Singapore. With the help of the Singapore National Employers' Federation, companies which are more dependent on foreign workers have worked out new wage arrangements for their new foreign workers taking into account the levy scheme and the need to maintain cost competitiveness. Existing Malaysian workers in the manufacturing and hotel sectors will remain on the CPF scheme so long as their work permits are renewed.

My Ministry has been in close touch with the Singapore National Employers' Federation as well as some affected companies to monitor the implementation of the levy scheme. The feedback so far indicates that companies are able to recruit workers on the new wage regime worked out by the Federation. We will continue to monitor the situation.

The levy scheme is not intended to make it easier for companies to engage foreign workers. It is a mechanism to regulate the demand for foreign workers in order that a revolving pool of foreign workers can be allowed beyond 1992 without creating over-dependence on foreign workers.