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Budget 2020 Roundtable: Help needed with foreign worker levies and quotas, Economy News & Top Stories

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The Government has a good long-term view of reducing reliance on foreign labour, but companies also need short-term measures in easing foreign worker levies and flexibility with quotas to get them through this trying period. That was one of the messages from experts taking part in last Wednesday’s post-Budget roundtable.

The Budget cut the quota for S Pass workers in the construction, marine shipyard and process sectors. S Pass workers are mid-skilled foreigners earning at least $2,400 a month.

The quota will be tightened from 20 per cent to 18 per cent on Jan 1 next year, and then to 15 per cent on Jan 1, 2023.

United Overseas Bank senior economist Alvin Liew said: “Construction, shipyards, marine and process (sectors) use a lot of foreign labour.

“And they are facing this particular crisis, as a lot of their workers are also stuck somewhere else. So they may require more assistance. Some short-term ease of the levy rates could help as well. But, unfortunately, we did not see it this time.”

Foreign worker levy rates will be maintained for all sectors this year.

Singapore Business Federation chief executive Ho Meng Kit told the panel this news was not welcome, but also not unexpected.

“Our members are asking for a reduction in foreign worker levy, particularly sectors affected by the virus, and this was something given during Sars.

“But this time, it was not given, because if it had been, then it’s an inconsistent message (with the tightening of quotas),” he said.

Nominated MP Walter Theseira, an associate professor of economics, said companies will face a problem with the quotas.

“With the tightness in the local labour market, the reality is that if an industry has to lose some foreign workers, they’re not going to find it easy to get locals to replace them.”

He added that some locals could be underemployed, with skills not being used, and could be redeployed in these industries. But it also depends on how attractive these jobs are to them.

Mr Ho urged the Government to be flexible with quotas for the companies that need help.

He said: “We should not leave companies in those sectors without a choice. If they don’t have a choice of getting locals to fill up those jobs… then you’re forcing the companies to relocate.

“If they’re really expanding and they are in an industry in which those skills are really not available (among locals), and it’s not for lack of trying, then some flexibility can be given on a (case-by-case) basis.”



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