CONTRACT FOR PUBLIC HOUSING AWARDED BY THE HOUSING AND DEVELOPMENT BOARD IN 1984

Mr Robert Chua Teck Chew asked the Minister for Labour what are the latest trends of employment of foreign workers by the various sectors of our economy and their long-term economic or social impact and whether the Government is considering any changes to its foreign worker policy to counter any undesirable trends.

Dr Lee Boon Yang: The demand for foreign workers varies from economic sector to sector. In the manufacturing sector, despite advances in technology, more higher value added investments and redistribution of labour-intensive operations to the region, the foreign worker population has remained largely stable since 1990. In fact, there has been a slight pick-up in employment of foreign workers in the manufacturing sector since the early part of the year. The marine sector is currently facing a slowdown in business. Nevertheless, the foreign worker population in the marine sector has been increasing since the middle of the year. The domestic maid population also continues to increase, although the increase has been moderated by the higher levy of $300 per domestic maid introduced since 1st April 1992. The strong growth in the service and construction sectors has resulted in heavy demand for more foreign workers. In particular, the construction sector had benefitted from the liberalisation of dependency ratio from 1:3 to 1:5 foreign workers since November 1992.

In the longer term, we must achieve more capital intensive, higher technology and higher value-added economic enterprises. This is the only solution to maintaining our competitiveness with a base of only 3 million Singaporeans. We cannot hope to compete in the labour intensive industries against our neighbours with far larger population bases. The emergence of India, Vietnam and the PRC as market-oriented economies makes it even more urgent for us to move away from cheap-labour activities. Already the impact of having more than 200,000 foreign workers in Singapore is being felt, such as the difficulties of housing foreign workers and the problems created when they congregate in some parts of Singapore.

My Ministry will continue to monitor the situation. Where demand has risen and there are sound economic reasons to allow more foreign workers into Singapore, we will adjust the dual mechanism of dependency ratios and foreign worker levy to regulate the growth in foreign workers.

Mr Chiam See Tong asked the Minister for National Development, in respect of each contract for public housing awarded by the Housing and Development Board in 1984, what were (i) the financing and overhead costs and (ii) the professional and supervisory fees, as percentages of the total construction costs.

Dr Richard Hu Tsu Tau: HDB awarded some 60 contracts for public housing in 1984. Detailed information on the financing/overhead and professional/supervisory costs for each contract awarded 9 years ago, in 1984, is no longer maintained by HDB.

All these costs, however, would have been well within the market equivalents. For example, interest on Government loans for the construction of flats for sale was 6% p.a. in FY 84/85, as compared to the prime lending rate of 9.4% in that year. HDB's professional/supervisory costs have also been historically stable at around 4% to 5%.