Business leaders call for flexibility in foreign-worker quota

Some say productivity gains in the services sector has been uneven, so tightening the quota in blanket fashion is 'unfair'


IT HAS been three weeks since the Finance Minister announced a tightening of the number of foreign workers that the services sector can hire, but companies big and small are still hopeful of greater flexibility when the new cap kicks in.

Business leaders made a plea to the government on Friday to not adopt a blanket approach in reducing the dependency ration ceiling (DRC) for the services sector, as unveiled in the latest Budget.

They said they understood that lowering the industry's reliance on foreign workers was inevitable, but still hoped the government would be flexible to make the "bitter pill" more palatable.

They were making their points at a post-Budget forum organised by Chinese daily Lianhe Zaobao and held at The Fullerton Hotel Singapore.

Teo Siong Seng, who chairs the Singapore Business Federation, noted that the the players in the services sector have achieved varying levels in productivity improvements; the food and beverage sub-sector, for example, has lower productivity.

"By applying the reduction across the board, wouldn't it be unfair to companies that have higher productivity?" he asked.

He suggested that the government be more flexible in applying the foreign manpower quotas to companies that have made efforts and achieved higher productivity.

Singapore Manufacturing Federation president Douglas Foo echoed this sentiment, and asked that the government provide more assistance.

He raised the possible consequences of companies driven to closure or to relocate overseas if they find themselves unable to cope with tightened foreign worker numbers.

The DRC refers to the maximum permitted ratio of foreign workers to the total workforce that a company is allowed to hire.

From Jan 1, 2020, the DRC for the services sector will be lowered from the current 40 per cent to 38 per cent; it will be cut further to 35 per cent from Jan 1, 2021.

DRCs remain unchanged for all other sectors.

The S-Pass sub-DRC for the services sector will also be lowered from the current 15 per cent to 13 per cent on Jan 1, 2020, and to 10 per cent from Jan 1, 2021.

President of Singapore Chinese Chamber of Commerce and Industry Roland Ng said companies are facing difficulties in restructuring and digitalisation.

He said the government's support programmes and funding may be available, but there is a shortage of skilled staff, and he does not know where to find suitably skilled workers. He added that upgrading workers' technical know-how takes time.

Responding, Mr Heng said Singapore has to make great efforts in economic restructuring to tap opportunities made available by new technologies and globalisation.

And every nation wants to see its economy would move up the value chain, so that their workers and enterprises can be well rewarded financially.

He urged enterprises to apply for aid through programmes such as the SME (small and medium-sized enterprises) Go Digital and Automation Support Package to help them in their restructuring efforts.

He also addressed the concern of diesel excise duty doubling to S$0.20 a litre, saying that a badly polluted Singapore would lose its appeal to businesses and talents.

Participants of the session, conducted in Mandarin, included SME owners and representatives from trade associations.

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