WAGE GUIDELINES FOR EMPLOYMENT PASSES

Dr Toh See Kiat asked the Minister for Manpower whether he will lower the wage guidelines for the different categories of employment passes to reflect the 15% reduction in wage costs that has taken place.

The Minister of State for Manpower (Encik Othman bin Haron Eusofe) (for the Minister for Manpower): Mr Speaker, Sir, a foreigner seeking to work in Singapore will be considered for a work pass commensurate with his skills and economic contributions to Singapore. Better qualified foreigners are issued with "P" or "Q" work passes. In assessing the type of work pass to be issued, my Ministry takes into consideration a number of factors including the foreigner's educational qualification, job experience and income as well as the nature of the job.

I would like to stress that although the income criterion is used as a proxy to the economic contribution of the foreigner, it is, however, not the sole criterion. The work pass system is designed to provide flexibility in considering all deserving applications for work passes. Foreigners with appropriate qualifications and skills may be given "P" or "Q" passes even though they do not meet the income criterion.

The Committee on Singapore's Competitiveness has recommended to reduce total wage cost by 15%. Hence, foreigners working in Singapore may also suffer a cut in income. But they will not be denied a work pass on account of their lower income. Work passes will be issued or renewed based on the factors I have just pointed out. Since the bulk of the 15% reduction in total wages will come from the 10 percentage point cut in employers' CPF contributions and a reduction in the variable wage component, reduction in basic wages, if any, will not be significant.

My Ministry will continue to exercise flexibility in assessing work pass applications. As such, there is no need to review the income criterion used in assessing work pass applications.

Dr Toh See Kiat (Aljunied): Sir, the Minister of State has said that the bulk of reduction of the foreigners' income would come from the CPF cut. But most foreigners would actually not be paying CPF. So how would the Minister of State explain the reduction?

Encik Othman bin Haron Eusofe: Sir, let me repeat my answer again. Since the bulk of the 15% reduction in total wages will come from the 10 percentage point cut in employers' CPF contributions and a reduction in the variable wage component, reduction in basic wages, if any, will not be a significant component. In that sense, we do not have to review the income criterion used in assessing work pass applications.

Dr Toh See Kiat: But my point is that the foreigners who need employment passes usually would not have CPF payment. So if there is a pay-cut, it will be completely from their pay and not from CPF cuts

Encik Othman bin Haron Eusofe: As I have said, we will look into the various factors which include the income criterion. So even if the income is reduced, it will not be the only sole factor. There are other factors which we look into in assessing and considering new applications or renewals of work passes.

Mr Jeyaretnam: May I ask the Minister of State whether he would give a comprehensive statement of the guidelines or criteria that are adopted by his Ministry in the granting of employment passes?

Encik Othman bin Haron Eusofe: Mr Speaker, Sir, the Member asked whether we have issued a comprehensive statement of the guidelines on how we issue work passes. In fact, on 24th July 1998, my Ministry issued a press statement, which was carried in all the local press, on the conditions and criteria for issuing of the various work passes. A press statement has been given and the details were in the press statement. This has been widely publicised. For those who are applying for work passes and if they need any clarification, they can always come to the Ministry to get the clarification. But a statement has been issued spelling out the criteria for the issue of the various categories of work passes.

Mr Jeyaretnam: May I ask the Minister of State, apart from this press release, whether there is an official policy document? If there is, will that be made available to the Members of this House?

Encik Othman bin Haron Eusofe: Sir, in fact, we have published a booklet on the employment pass. This has been issued freely and copies are available in the community centres and community clubs. Anybody can pick this up. It explains the basis on which the work passes are issued. If the Member likes, I can give him a copy.

Dr Toh See Kiat: Sir, can I have the assurance of the Minister of State that whatever figures are in these guidelines, they would not serve as a minimum wage guideline in terms of employment of foreigners?

Encik Othman bin Haron Eusofe: Sir, as I have said, we use this as one of the conditions for the issue of work passes and we will continue to review the guidelines as circumstances change, and where there is a need to do so.