Budget debate: Higher EP quotas for SMEs, more non-traditional sources among MPs’ foreign labour ideas

LETTING smaller businesses hire more Employment Pass (EP) holders and having work permit hires from more countries were among foreign labour-related suggestions from Members of Parliament (MPs) on Thursday (Feb 27).

In the second day of debate on Budget 2025, MPs stressed that alongside upskilling and protecting local workers, Singapore needs foreign workers for skills transfer and to fill shortages.

East Coast GRC MP Cheryl Chan proposed more generous EP quotas for small and medium-sized enterprises (SMEs).

Having separate quotas for multinational corporations (MNCs) would let SMEs hire more foreign talent while keeping overall foreign worker numbers stable, she said.

Separately, she recommended raising the minimum that MNCs must pay foreign professionals in junior roles. This will create opportunities to develop a sizeable local workforce, she said.

Nominated MP Mark Lee had four ideas to tackle “acute shortages of skilled and semi-skilled workers in foundational sectors such as manufacturing”, which support high-growth industries.

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First, he suggested expanding the Non-Traditional Sources (NTS) Occupation List, particularly for the manufacturing sector. For occupations on the list, manufacturing and services firms can hire work permit holders from NTS markets – that is, sources other than the usual countries.

Adding specialised roles to this list will help businesses fill them, Lee said.

Second, he proposed having more NTS countries “to address the drying up of traditional sources like Malaysia and China”.

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Third, there could be more transitional labour-related support for companies undergoing transformation. For instance, the dependency ratio ceiling – which caps the share of foreign workers in a company’s workforce – could be “conditionally” expanded.

The Manpower for Strategic Economic Priorities Scheme – under which eligible companies that contribute to Singapore’s strategic growth can get additional S Pass and work permit quotas – could also have a longer support duration.

Finally, companies could be given more flexibility in deploying foreign workers, particularly for skilled and semi-skilled roles. “Current manpower restrictions prevent businesses from optimising workforce allocation, even when there is clear economic justification to do so.”

Such cross-deployment could be piloted between majority-owned entities across sectors, he said, enabling businesses to reallocate workers where they are most needed.

These moves will not undermine efforts to build up the local workforce, said Lee, but will instead help businesses better utilise resources and stay competitive, without unnecessary bottlenecks.