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Singapore Budget 2019: Singapore to cut services sector dependency ratio ceiling, defer foreign worker levy rates for shipyard and process sectors
SINGAPORE will reduce the services sector Dependency Ratio Ceiling (DRC) in two steps, from 40 per cent to 38 per cent on Jan 1, 2020, and to 35 per cent on Jan 1, 2021, Finance Minister Heng Swee Keat said in Parliament on Monday.
The government will also reduce the services sector S Pass Sub-DRC in two steps, from 15 per cent to 13 per cent on Jan 1, 2020, and to 10 per cent on Jan 1, 2021.
He stressed that the government's basic approach to foreign worker policies has remained consistent. Based on evidence on the pace of foreign worker inflows, and the progress being made in raising productivity across sectros, it needs to calibrate policies.
"The government recognises the economic headwinds and cost pressures ahead of us. But if we do not take action early, our firms will find it harder to compete in the yeas ahead, and our workers will be left behind,'' he said.
To support firms as they adjust to these changes, the government will put in place the following measures, till FY2022. First, the 70 per cent funding support level for the Enterprise Development Grant was due to lapse after Mar 31, 2020.
"I will now extend this enhanced funding support for three more years up to 31 March 2023,'' the minister said.
Second, the government will do the same for the Productivity Solutions Grant, and expand its scope to support up to 70 per cent of the out-of-pocket cost for training.
Singapore government will also defer for another year the previously announced increase in Foreign Worker Levy rates for the marine shipyard and process sectors, which have only begun showing early signs of recovery.
For all of our Singapore Budget 2019 coverage, news, analysis, and infographics visit bt.sg/budget19