FOREIGN MAID LEVY

Mr Steve Chia Kiah Hong asked the Minister for Manpower whether the Ministry plans to increase the foreign maid levy and, if so, whether the Ministry has considered other alternatives other than just increasing the levy.

The Minister of State for Manpower (Dr Ng Eng Hen) (for the Minister for Manpower): Mr Speaker, Sir, the Government announced in May this year that the moratorium on all foreign worker levies, of which foreign domestic workers fall under this category, would be extended until December 2002. We will announce the outcome of the review on the foreign worker levy in early December.

Dr Jennifer Lee (Nominated Member): Could the Minister of State give working women in Singapore an assurance that there are real and adequate alternatives in the form of local domestic and nanny or child care services available before any increases in foreign maid levy are decided upon?

Dr Ng Eng Hen: Mr Speaker, Sir, to give that assurance means that you will have to answer a number of needs. I think we would have painted ourselves in a corner if we had worked on that principle. Yes, it is difficult to raise families when you want to juggle that with your work commitments. Yes, it is also more expensive to hire local help. But we have to balance this with the increasing number of foreign domestic workers that we have already seen. From the moratorium last time, the number of maids has increased by about 20%, so much so that one in eight households currently have a foreign domestic worker. There are social repercussions.

What we can do is to continue to provide and expand domestic service as affordable alternatives for local households. For example, the CDCs, in particular, the Southeast CDC has piloted training emplacement programmes for various domestic services. These include cleaning, laundry, child care or eldercare. In line with these efforts, we will need to maintain a FDW levy at an appropriate level to moderate household demand for FDWs. But whether this would satisfy the majority of households, and whether this would be an attractive option remains to be seen and is relative. But we will continue to expand these efforts so that there are these alternatives.

Mr Tan Soo Khoon (East Coast): Mr Speaker, Sir, in 1999, we imposed a moratorium on the increase in the FDW levy because of the uncertain economic climate. Would the Minister of State agree that the economic climate is still uncertain and likely to be uncertain next year and, therefore, all the more reasons to continue with the moratorium on any increase?

Dr Ng Eng Hen: I agree with the hon. Member that the economic conditions are uncertain. But the other arm of the planning parameter was the rate of increase in the number of foreign domestic workers and despite the moratorium that has increased out of proportion to the households. As I have said, the moratorium continues to stand and when we do review the levy, we will take into consideration these factors and decide then whether there should be an increase of the levy or not.

Dr Jennifer Lee: As the Minister of State has observed, the number of foreign workers has continued to rise despite the levies. Would it not seem obvious by now, after so many years of experience that we have had, that the answer must be in something other than the levy? Would it not be a better approach therefore to analyse and permit families to have foreign workers based on need rather than by increasing the levy to an extent that it becomes unaffordable?

Dr Ng Eng Hen: Mr Speaker, Sir, to decide between one family and another based on need is an extremely difficult exercise and for society, I would say an invidious one. How would I judge, for example, whether a family with a diabetic mother of a blood sugar of 400 requires less of a foreign domestic worker versus another family who has three children and is making ends meet? Do I then train my officers to cater to each individual, assessing their needs? And upon pronouncement, would I have one happy family versus the other 10 families who have applied based on need who go away angry at the system? I think, based on a quota system, and to decide whether one family gets a foreign domestic worker based on another is an extremely difficult exercise. The levy is not a perfect solution. Other countries have tried other means. We will explore these means but I think it will be hard to run away from the conclusion or to arrive at the wrong conclusion that the levies do not work. The levies do moderate demand. But we will take into account these considerations and also the median household income over the last few years as well as the numbers that are in and what numbers we can fix socially which we can accept before arriving at a decision.

Mr Steve Chia Kiah Hong (Nominated Member): May I ask the Minister of State, for every family that has a maid, there is only one maid in a family. So what kind of social concern is the Minister worried about by having more maids in the country?

Dr Ng Eng Hen: Mr Speaker, Sir, if the NCMP would have gone through the papers for the last few months, he could not have but seen a number of abuses that we have talked about in this House. Let us say that we have 140,000 foreign domestic workers. Even if you take 1% of households that, for some reason or other, abuse their maids, we are talking about 1,400 maids. Over and above this, there will be repercussions on our social fabric. We cannot run away from the fact that the people are of different origins, different cultural backgrounds, the problems that they have in assimilation and the effect and distortion it creates in our own society. We do not want to make it harder for families to continue with their lives as it is. But we will have to judiciously balance this with other concerns.

Dr Jennifer Lee: Sir, does the Minister of State not think that it is a bit disingenuous of him to actually say that he would refrain from prescribing criteria for maids when, in fact, this Government has never been slow to prescribe, when it never had any doubts of its ability to prescribe what is in the best interest of the people?

Secondly, what advice would the Minister of State give to working women in Singapore should there be increases in the maid levy, which actually make it extremely difficult for them to continue to have a maid and yet balance all the responsibilities that they have between their home and their working roles? What advice would he give them in that circumstance?

Dr Ng Eng Hen: Sir, the advice sought from me was premised on the fact that the levy will be increased. I never said that the levy will be increased. I said that we will review it. So, I would not give advice when it is not needed yet.

Sir, I was accused of being disingenuous about not being able to prescribe criteria since this Government is so good at prescribing. I do not think it is a question of whether we can devise a series of formulae and prescriptions. But just think what the craft of that policy would lead society to. Do we really want to run a system and judge each family based on need? Picture, if you will, the desk at my Ministry and a line of families bringing with them their parents and children to assert, to emphasise, to prove that their need is greater than the person behind them. Do you really want a society to go along that line? I do not.

Mr Tan Soo Khoon: Mr Speaker, Sir, in 1982, when we first introduced the foreign domestic worker levy, which was then 30% of wages, and wages were much lower at that time, we had something like 14,000 foreign domestic workers. But now that it is $345 a month, we have got something like 140,000 workers, and it is very obvious that the Government is still not satisfied with the situation. Can I therefore ask the Minister of State what would be the number of foreign domestic workers that would be deemed acceptable to the Government?

Dr Ng Eng Hen: Sir, that is an intelligent question. The answer is no one knows, because we are at the front edge. No country has a large proportion of foreign workers as Singapore does. We are second only to Luxembourg, and I assure you that the character of the proportion of foreign workers in Luxembourg is quite different from what we have in Singapore. We are testing the norms and we are pushing the envelope because we are at the front edge. When our neighbouring countries decided that they had a problem with foreign workers, there was hell to pay. Do we know when we will reach breaking point? We do not. Have we crossed it? I do not know. It has just been increasing. So, we have 28%, based on our local population of foreign workers. Let me just say this. When we do know, I think it will be quite late and too late.

Mr Arthur Fong (West Coast): Sir, every Singaporean matters. When families employ maids, they pay $750 per month which includes the levy. They go out and work in a factory for $1,100. $350 per month counts for their family. If the maid levy is raised ---

Mr Speaker: What is your question, Mr Fong?

Mr Arthur Fong: I want to know whether the Minister is aware that when families go out to work and pay $750 a month for employing a maid, the $350 or more per month for the family means a lot to them, rather than get $250 or $350 from the CDC. This is the self-reliance that we are talking about. Would that not promote self-reliance that we have been talking about? And also with this policy, it actually shows that every Singaporean matters, if you think about it.

Mr Speaker: Do you wish to answer that question, Dr Ng?

Dr Ng Eng Hen: Sir, actually, I do not know what he asked. It has something to do with every Singaporean matters. I am trying to see the connection. It is a disingenuous question. I am trying to see the connection between what the levy has to do with every Singaporean matters. Yes, it is difficult to ration out a resource - foreign domestic workers. Yes, we impose a levy because it is a good tool to moderate demand. Is it the best way to do it? Are there other options that we have considered? Yes. Do we think that they are workable? No. Can we then help Singaporeans who need to pay the levy and who want a foreign domestic worker? Yes, we do. We have waiver of levies built into the tax system. Can we do without it? I do not think so. I think we still need it to moderate the demand. We cannot manage at the level of each individual household, who needs and who does not. I think this will continue to stay. But as I said, I am in no hurry to review. The moratorium has already been set, and I do not think Members would want my Ministry to hurry to review this.

Ms Braema Mathiaparanam: Sir, certain households have two maids. Can I ask the Minister of State, in his review, to perhaps consider a higher levy for the second maid?

Dr Ng Eng Hen: Sir, as what the NMP has said, we will consider it.

Mdm Halimah Yacob: I hope to ask an intelligent question, Sir. My question to the Minister of State is that since there is a gap that needs to be filled, and that is why there is an increasing demand for foreign domestic workers, what has the Ministry done in order to promote local industry services to fill this gap?

Dr Ng Eng Hen: Objectively, the Ministry has done a lot. It tried to promote a number of local domestic companies. Members would have read in the newspapers which we have promoted for them to portray local domestic companies who do cleaning, laundry and childcare. But the economic reality is that it is a wage problem. Yes, we can hire someone for a much cheaper wage and it is a convenience factor. Unless and until we reduce that wage disparity, it is an uphill climb. But until we reach there, we will continue to stimulate and provide alternatives. But the families and Singaporeans at the ground will choose, and they will choose based on economic concerns and economic planning norms. I agree with Mdm Halimah that there is a wage disparity which is hard to address, except through other means.

Mr Steve Chia Kiah Hong: Sir, if the Minister of State is concerned about the number of maids in Singapore, would he also consider limiting the number of maids per family?

Dr Ng Eng Hen: Yes.