FOREIGN WORKERS (Training)

Ms Olivia Lum Ooi Lin asked the Minister for Manpower in view of the recent announcement to increase with effect from January 2004 the monthly levy on a single-skilled worker from $30 to $320 in an effort to encourage construction companies to upgrade the skills of their workers, whether there are any specific interim measures the Ministry will take to help facilitate and ease the burden of construction companies in retraining their workers.

The Minister for Manpower (Dr Lee Boon Yang): Mr Speaker, Sir, the construction industry is the largest employer of foreign workers in Singapore. Although the vast majority possess a trade skill, this has not translated into improvements in Singapore's construction productivity. Thus, the Government had introduced multi-skilling and enhanced the skills criteria for lower foreign worker levy. This is to raise the overall skill level of the foreign construction workforce and reduce the industry's reliance on low-skilled workers. Multi-skilled workers can be deployed for a wider range of jobs at a construction site. This will result in more efficient manpower utilisation and higher productivity.

Sir, my Ministry and the BCA are mindful of the impact the changes may have on the industry. Only new foreign workers recruited after 1st January 2004 have to meet the new skills criteria to be eligible for the lower levy. Existing workers have a transition period of two years until 1st January 2005 to re-qualify for the lower levy. They will continue to be eligible for the low levy (currently at $30 per month) until this date, ie, 1st January 2005. So, most ongoing contracts would not be affected. With the long transition period, contractors would also have sufficient time to adjust their operations and factor the changes in their tenders. They should also have sufficient lead-time to train their workers to acquire a second skill during this period. Contracts of a longer duration that could be severely affected will be considered on a case-by-case basis by BCA.

Following these changes, contractors should not continue to recruit low skill foreign construction workers. The sensible thing is to make greater efforts to recruit better-skilled and more experienced workers. Business-wise, this is better than recruiting low-skilled workers to be trained in Singapore. While such multi-skilled workers will expect higher wages, the lower levy and productivity gains will more than offset any higher wage cost.

Mr Yeo Guat Kwang (Aljunied): Sir, in view of this change, will the Ministry continue to reduce the Man Year Entitlement (MYE) as recommended by the Construction 21 Committee every year?

Dr Lee Boon Yang: Mr Speaker, Sir, the answer is yes. Over the longer term, we will still move towards tightening the allocation of non-traditional source workers under the Man Year Entitlement scheme to contractors. But in view of the slew of changes that has been introduced this year, we have decided that, for this year, we will suspend any further revision of the Man Year Entitlement scheme. But, starting from next year, we will review the situation and if, in fact, there is still room for further reduction, which we believe that there would be, then we will carry on to achieve the target set by Construction 21, which is to half the dependency on foreign construction workers within a certain timeframe or faster, if we can achieve it.