No plans to waive foreign worker levy: Josephine Teo

Singapore

THE Singapore government does not plan to waive or reduce foreign worker levies despite calls from business leaders and MPs to do so in an economic environment that has already taken a battering from the coronavirus outbreak, the Republic's manpower minister said.

This comes a week after Deputy Prime Minister and Finance Minister Heng Swee Keat unveiled a S$4 billion Stabilisation and Support Package during Budget 2020 to rescue businesses and workers that have been adversely affected by the outbreak.

During the first day of the Budget debate in Parliament on Wednesday, Manpower Minister Josephine Teo noted that 60 per cent of the package goes towards the Jobs Support Scheme and enhanced Wage Credit Scheme which will benefit all businesses with local employees.

She said it is understandable that businesses that hire foreign workers had hoped for levies to be waived, as was in the case in 2003 when the government put out a S$230 million relief package to support businesses during the severe acute respiratory syndrome (Sars) outbreak.

In fact, this was on the wish list of several MPs who spoke, including Marine Parade GRC MP Seah Kian Peng and Nominated MPs Arasu Duraisamy and Douglas Foo.

While levies have been temporarily waived for employers whose foreign workers are required to serve quarantine, Mrs Teo said waiving levies for foreign workers in general will not benefit the many employers who only have local employees.

"First, in supporting businesses, our priority was also to preserve local employment. Second, as much as we want to help businesses, measures to deal with the short-term fallout should not negate longer-term efforts for companies to become less reliant on foreign manpower for growth.

"Levy waivers or reductions would have run counter to both objectives," Mrs Teo said.

Earlier, MPs spoke in support of the Budget, which they said is responsive and forward-thinking given the challenging economic climate further complicated by the Covid-19 outbreak.

While several MPs lauded the Jobs Support Scheme, which will help companies defray wage cost, they also had suggestions to tweak the S$1.3 billion initiative.

Saktiandi Supaat, MP for Bishan-Toa Payoh GRC, asked if the payout could be brought forward from July 31 as the half-year period may be a long wait for small and medium enterprises facing liquidity challenges.

Holland-Bukit Timah GRC's Liang Eng Hwa suggested that the qualifying period for the scheme, which is for salary paid from Oct to Dec 2019, should be changed to Jan to July 2020. He said this would eliminate the possibility of employers laying off workers after enjoying the cash grant.

NMP Arasu expressed concern that the duration of this scheme is too short and may not be enough if the Covid-19 outbreak is extended.

During the Budget, DPM Heng also announced the government's plans to phase out internal combustion engine vehicles by 2040 in a major push for electric vehicles (EV).

Yee Chia Hsing, MP for Chua Chu Kang GRC, asked if a tax can be levied on car dealers who do not fulfil a sales quota for EVs or plug-in hybrid. He said if distributors do not meet at least a 20 per cent sales target by 2030, there is no way Singapore can meet its goal by 2040.

"Without this push, investment in charging stations will be wasted, and charging stations will become white elephants," Mr Yee said.

The Budget debate continues on Thursday.