Singapore extends foreign worker levy cut till end of this year
28 February 2003
Channelnewsasia
Singapore has extended the cut in the foreign worker levy till the end of this year.
Deputy Prime Minister and Finance Minister Lee Hsien Loong said that the number of foreign workers has remained stable, and so there is no urgency to raise it back again.
He was presenting Singapore's 2003 budget in parliament on Friday.
The levy was slashed by $90 for unskilled workers and $70 for skilled workers in last year's budget.
The reduction was extended last December, until June 2003.
But the Ministry of Manpower will review the skilled worker levy this year to decide whether it is necessary to peg it at a more realistic level next year.
The skilled worker levy is now just $30.
Friday, February 28, 2003
Wednesday, February 12, 2003
Push to bring in skilled workers for construction
Push to bring in skilled workers for construction
By Ahmad Osman and Laurel Teo
12 February 2003
Straits Times
The aim is to have fewer but better trained foreign workers. The reward for employers: a lower monthly levy
THE unskilled foreign worker will be a rare sight at construction sites across Singapore from next year.
From Jan 1, every new foreign worker must be skilled in at least one task - brick-laying for example. But even then, his employer will have to pay a foreign worker levy of $320 a month.
But if a worker has at least two skills - say, he can do plastering in addition to laying bricks - the levy his boss pays will be just $30.
The new rules will steer the construction industry towards hiring better-skilled workers and encourage bosses to help their employees to upgrade their skills or take on workers able to do more than one task.
Their reward for using such 'multi-skilled' workers: the much lower levy of $30.
That push could have the indirect effect of weeding out less able and unproductive workers from an industry that employs around 180,000 foreigners and is already reeling from the downturn.
Another key change was announced yesterday by the Manpower Ministry and the Building and Construction Authority (BCA) to cut down Singapore's reliance on foreign workers.
It said that from October, industry players can hire only four foreign construction workers for every one Singaporean employed.
The ratio used to be 1:5. That was in the boom years of the 1990s, when demand for workers soared. But since 1997, the volume of construction projects has declined.
The cut will not affect most companies because they are already operating below the old ratio. However, productivity in the industry is down.
Ministry and BCA officials said that despite the sharp rise in the number of skilled workers since 1998, productivity growth in the industry in the last two years was just slightly above 0 per cent.
Industry players had no quarrel with the Government's move to improve the level of skills of their workers.
But they are concerned about the cost involved in upgrading the skills of workers and were not able to say just yet whether the costs of projects would be affected.
'We do not have the figures on the impact of labour cost but, generally, contractors would need to set aside $500 to $1,000 for the training and testing of existing foreign workers to acquire skills evaluation certificate qualifications for each worker,' said Mr Simon Lee, the Singapore Contractors Association Ltd executive director.
But the BCA's director of its manpower planning division, Mr William Tan, said the industry had ample time to plan and adapt tender prices for new projects in response to the changes announced.
He said studies in some developed countries showed that multi-skills could lead to savings in labour costs of between 5 and 20 per cent.
Yesterday's announcement affects new workers from eight countries: India, Sri Lanka, Thailand, Bangladesh, Myanmar, the Philippines, Pakistan and China.
Those who are already working here have an extra year, from Jan 1, 2005, to comply with the changes, which also covers workers from Malaysia who have skills certificates.
And from Jan 1, 2006, workers who are regarded as 'multi-skilled' must be re-certified in at least one of their skills every two years.
As an incentive for employers to opt for upgrading, the Government will cut the higher monthly levy for foreign construction workers from $470 to $320 from Jan 1.
By Ahmad Osman and Laurel Teo
12 February 2003
Straits Times
The aim is to have fewer but better trained foreign workers. The reward for employers: a lower monthly levy
THE unskilled foreign worker will be a rare sight at construction sites across Singapore from next year.
From Jan 1, every new foreign worker must be skilled in at least one task - brick-laying for example. But even then, his employer will have to pay a foreign worker levy of $320 a month.
But if a worker has at least two skills - say, he can do plastering in addition to laying bricks - the levy his boss pays will be just $30.
The new rules will steer the construction industry towards hiring better-skilled workers and encourage bosses to help their employees to upgrade their skills or take on workers able to do more than one task.
Their reward for using such 'multi-skilled' workers: the much lower levy of $30.
That push could have the indirect effect of weeding out less able and unproductive workers from an industry that employs around 180,000 foreigners and is already reeling from the downturn.
Another key change was announced yesterday by the Manpower Ministry and the Building and Construction Authority (BCA) to cut down Singapore's reliance on foreign workers.
It said that from October, industry players can hire only four foreign construction workers for every one Singaporean employed.
The ratio used to be 1:5. That was in the boom years of the 1990s, when demand for workers soared. But since 1997, the volume of construction projects has declined.
The cut will not affect most companies because they are already operating below the old ratio. However, productivity in the industry is down.
Ministry and BCA officials said that despite the sharp rise in the number of skilled workers since 1998, productivity growth in the industry in the last two years was just slightly above 0 per cent.
Industry players had no quarrel with the Government's move to improve the level of skills of their workers.
But they are concerned about the cost involved in upgrading the skills of workers and were not able to say just yet whether the costs of projects would be affected.
'We do not have the figures on the impact of labour cost but, generally, contractors would need to set aside $500 to $1,000 for the training and testing of existing foreign workers to acquire skills evaluation certificate qualifications for each worker,' said Mr Simon Lee, the Singapore Contractors Association Ltd executive director.
But the BCA's director of its manpower planning division, Mr William Tan, said the industry had ample time to plan and adapt tender prices for new projects in response to the changes announced.
He said studies in some developed countries showed that multi-skills could lead to savings in labour costs of between 5 and 20 per cent.
Yesterday's announcement affects new workers from eight countries: India, Sri Lanka, Thailand, Bangladesh, Myanmar, the Philippines, Pakistan and China.
Those who are already working here have an extra year, from Jan 1, 2005, to comply with the changes, which also covers workers from Malaysia who have skills certificates.
And from Jan 1, 2006, workers who are regarded as 'multi-skilled' must be re-certified in at least one of their skills every two years.
As an incentive for employers to opt for upgrading, the Government will cut the higher monthly levy for foreign construction workers from $470 to $320 from Jan 1.
Changes to foreign worker levies
Changes to foreign worker levies
By Audrey Tan
12 February 2003
Business Times Singapore
Dependency ceiling lowered in push for better-skilled, smaller workforce
THE government will change the levies and dependency ceiling for foreign workers in the construction industry, to push for a smaller but better-skilled foreign workforce.
The changes are aimed at cutting the industry's reliance on foreign labour, while improving its productivity and foreign labour management, Ministry of Manpower (MOM) officials said yesterday.
But while MOM admitted that contractors may have to pay more - either in the form of higher levies or to further train and certify their workers - it says that there are also cost savings from having 'multi-skilled' workers and a smoother workflow. Manpower Development director William Tan pointed to overseas studies showing a 5 to 20 per cent reduction in labour costs. 'The cost impact (of the changes) is negligible,' he said at a press briefing.
The changes announced yesterday will be phased in over three years, to give contractors time to plan, allocate their resources and adjust their tender price for projects, he added.
The levy changes, for example, will first affect all new workers from non-traditional sources (NTS) of labour from Jan 2004, before being extended to existing NTS workers in Jan 2005. NTS refers to sources of labour other than Malaysia.
From next year, all new workers will need to be certified by the Building and Construction Authority (BCA) in at least one skill. Currently, NTS foreigners without this certification are allowed to work here, but the contractor pays a higher levy for them.
To qualify for the lower levy, however, workers will need to be certified in more than one skill. Now, all workers with at least a one-skill qualify for the lower levy.
The changes mean that contractors will have to further train their workers and certify them in more than one skill, or risk paying the higher levy. BCA charges $250 to test each worker in each skill. Also, multi-skilled workers levied at the lower rate will need to be re-certified in at least one skill every two years.
But MOM will also cut the upper-tier levy rate to $320 next year, from $470 currently. The lower levy remains unchanged at $30.
And to further cut reliance on foreign workers, it will cut the dependency ceiling for the industry from the current one local worker to every five foreign workers ratio, to a new 1:4 ratio.
The changes announced yesterday will affect some 10,000 contractors who currently employ foreign construction workers. There are just under 180,000 such workers here, of which nearly 80 per cent have at least one-skill certification.
Contractors BT spoke to said the changes will be adverse for smaller contractors, though they welcomed the lag time before they are implemented.
But a leading contractor questioned if 'multi-skilling' a worker will result in much productivity improvement. 'There are some trades where you don't need two skills, such as painting. The cost savings are also a bit of a fallacy. A worker can only work eight to ten hours a day. (The idea of cost savings) assumes workers do nothing half the time now, which is not the case,' he said.
Yesterday, MOM also said that to counter the rising trend of foreign workers being abandoned and illegally deployed in other industries, it will require all construction companies wishing to employ NTS workers to register with BCA's Contractors Registration System or Singapore Contractor Association's Singapore List of Trade Subcontractors (SLOTS) from next year. All the above changes only affect work permit, not employment pass, holders.
By Audrey Tan
12 February 2003
Business Times Singapore
Dependency ceiling lowered in push for better-skilled, smaller workforce
THE government will change the levies and dependency ceiling for foreign workers in the construction industry, to push for a smaller but better-skilled foreign workforce.
The changes are aimed at cutting the industry's reliance on foreign labour, while improving its productivity and foreign labour management, Ministry of Manpower (MOM) officials said yesterday.
But while MOM admitted that contractors may have to pay more - either in the form of higher levies or to further train and certify their workers - it says that there are also cost savings from having 'multi-skilled' workers and a smoother workflow. Manpower Development director William Tan pointed to overseas studies showing a 5 to 20 per cent reduction in labour costs. 'The cost impact (of the changes) is negligible,' he said at a press briefing.
The changes announced yesterday will be phased in over three years, to give contractors time to plan, allocate their resources and adjust their tender price for projects, he added.
The levy changes, for example, will first affect all new workers from non-traditional sources (NTS) of labour from Jan 2004, before being extended to existing NTS workers in Jan 2005. NTS refers to sources of labour other than Malaysia.
From next year, all new workers will need to be certified by the Building and Construction Authority (BCA) in at least one skill. Currently, NTS foreigners without this certification are allowed to work here, but the contractor pays a higher levy for them.
To qualify for the lower levy, however, workers will need to be certified in more than one skill. Now, all workers with at least a one-skill qualify for the lower levy.
The changes mean that contractors will have to further train their workers and certify them in more than one skill, or risk paying the higher levy. BCA charges $250 to test each worker in each skill. Also, multi-skilled workers levied at the lower rate will need to be re-certified in at least one skill every two years.
But MOM will also cut the upper-tier levy rate to $320 next year, from $470 currently. The lower levy remains unchanged at $30.
And to further cut reliance on foreign workers, it will cut the dependency ceiling for the industry from the current one local worker to every five foreign workers ratio, to a new 1:4 ratio.
The changes announced yesterday will affect some 10,000 contractors who currently employ foreign construction workers. There are just under 180,000 such workers here, of which nearly 80 per cent have at least one-skill certification.
Contractors BT spoke to said the changes will be adverse for smaller contractors, though they welcomed the lag time before they are implemented.
But a leading contractor questioned if 'multi-skilling' a worker will result in much productivity improvement. 'There are some trades where you don't need two skills, such as painting. The cost savings are also a bit of a fallacy. A worker can only work eight to ten hours a day. (The idea of cost savings) assumes workers do nothing half the time now, which is not the case,' he said.
Yesterday, MOM also said that to counter the rising trend of foreign workers being abandoned and illegally deployed in other industries, it will require all construction companies wishing to employ NTS workers to register with BCA's Contractors Registration System or Singapore Contractor Association's Singapore List of Trade Subcontractors (SLOTS) from next year. All the above changes only affect work permit, not employment pass, holders.
Tuesday, February 11, 2003
Singapore to let in fewer foreign construction workers
Singapore to let in fewer foreign construction workers
11 February 2003
Associated Press Newswires
SINGAPORE (AP) - Wealthy Singapore said Tuesday it will let in fewer foreign construction workers in a move designed to open jobs for Singaporeans facing steep unemployment.
Foreign workers, most from other less-affluent Asian countries such as Bangladesh, China and India, fill many of the low-paying positions in the construction, manufacturing and food-preparation industries - jobs shunned by many Singaporeans.
Starting Oct. 1, construction companies will be required to hire one Singaporean worker for every four foreigners, the Ministry of Manpower said in a statement.
The previous ratio was one Singaporean to five foreign workers.
Overseas workers will also have to meet higher skill requirements than before, the statement said.
"These changes aim to reduce foreign labor reliance," the statement said.
Singapore recently recovered from the worst economic slump in its 37-year history as a nation. It still faces rising unemployment.
About 4.2 percent of Singaporeans were unemployed in the final quarter of 2002. The central bank has forecast unemployment will rise to a new 17-year high of 5.5 percent within the first half of 2003.
The new policy will require all foreign construction workers to be certified in at least one skill starting from Jan. 1, 2004, the statement said. It did not elaborate.
The government will reduce the foreign worker levy for multi-skilled workers, the statement said.
There are about 785,400 foreign workers in Singapore, ranging from bank executives to construction workers.
Singapore hires construction workers from Malaysia, India, Sri Lanka, Thailand, Bangladesh, the Philippines, Pakistan and China, the statement said.
11 February 2003
Associated Press Newswires
SINGAPORE (AP) - Wealthy Singapore said Tuesday it will let in fewer foreign construction workers in a move designed to open jobs for Singaporeans facing steep unemployment.
Foreign workers, most from other less-affluent Asian countries such as Bangladesh, China and India, fill many of the low-paying positions in the construction, manufacturing and food-preparation industries - jobs shunned by many Singaporeans.
Starting Oct. 1, construction companies will be required to hire one Singaporean worker for every four foreigners, the Ministry of Manpower said in a statement.
The previous ratio was one Singaporean to five foreign workers.
Overseas workers will also have to meet higher skill requirements than before, the statement said.
"These changes aim to reduce foreign labor reliance," the statement said.
Singapore recently recovered from the worst economic slump in its 37-year history as a nation. It still faces rising unemployment.
About 4.2 percent of Singaporeans were unemployed in the final quarter of 2002. The central bank has forecast unemployment will rise to a new 17-year high of 5.5 percent within the first half of 2003.
The new policy will require all foreign construction workers to be certified in at least one skill starting from Jan. 1, 2004, the statement said. It did not elaborate.
The government will reduce the foreign worker levy for multi-skilled workers, the statement said.
There are about 785,400 foreign workers in Singapore, ranging from bank executives to construction workers.
Singapore hires construction workers from Malaysia, India, Sri Lanka, Thailand, Bangladesh, the Philippines, Pakistan and China, the statement said.
Friday, February 7, 2003
DPM Lee hints at changes to foreign worker levy scheme
DPM Lee hints at changes to foreign worker levy scheme
By Audrey Tan.
7 February 2003
Business Times Singapore
IT'S not just high-flying foreign talent that helps create jobs for Singaporeans, but lower skilled foreign workers also help keep companies, and employment, in Singapore, Deputy Prime Minister Lee Hsien Loong said yesterday.
But he hinted at further changes to the foreign worker levy scheme: 'I think we can rationalise and smooth out our system a little bit more.' He was responding to a question yesterday on how Singapore reconciles its foreign worker policy with rising unemployment.
He said: 'We have to reconcile ourselves to the reality of life which is that we are facing competition and having a certain proportion of foreign workers is very helpful for companies to be in Singapore.'
If Singapore didn't have foreign workers, 'it is not automatic that the jobs will just go to a Singaporean', he added. '(If companies) can't find the right Singaporean (for the job), they will go somewhere else.'
He cited the example of graveyard shifts, which Singaporeans are reluctant to work. 'It is not a question of pay. You just can't get the Singaporeans to do it.'
But capital-intensive plants need to operate round-the-clock to cover their depreciation costs, he said. 'So, by having the foreign workers in, we are actually creating jobs in the first and second shifts for Singaporeans, which will otherwise not be there.'
But he added: 'It doesn't mean we are letting in foreign workers totally without constraint.'
For example, while the Economic Review Committee (ERC) reaffirmed the need to keep Singapore's doors open to foreign workers, it also said: 'We must carefully manage the inflow to benefit our economy and our people.'
An appropriate levy will regulate the demand for foreign workers, and ensure that they complement rather than displace Singaporean workers. This will ultimately create more jobs for Singaporeans, it said.
Tan Khee Giap, associate professor at the Nanyang Technological University, noted that Singapore needs to have foreign workers, even in a full employment situation. 'There are only 80,000 (Singapore residents) unemployed and 750,000 foreign workers here. The 80,000 cannot fill all the gaps,' he said.
But the current foreign worker policy could be more market-oriented, he suggested. Instead of quotas, the government could set fixed levies and give more leeway to employers to decide how many foreign workers to employ, he said.
Currently, the Ministry of Manpower sets different levies for skilled and unskilled workers in each sector. It also sets dependency ceilings (the proportion of foreign workers in a company) or ratios (X foreign workers to Y local workers).
The relook at the foreign worker levy comes at a time when structural unemployment is becoming a problem. 'I don't think we are going to go back to a position where unemployment will go down to one or 2 per cent like before 1997,' said Mr Lee yesterday.
To tackle this problem, the government will train workers to stay employable, help the unemployed find jobs and assist those who cannot find employment, he said. But the ERC rejected the proposal of unemployment insurance, saying such schemes are tough to implement and may lead to an erosion of the work ethic.
Mr Lee said the government will refine its assistance schemes to help those most in need of help and who have made the effort to help themselves. 'You have to make an effort. If you just sit at home and say: 'Well, I'm waiting for something to come', then you will have to wait,' he said.
By Audrey Tan.
7 February 2003
Business Times Singapore
IT'S not just high-flying foreign talent that helps create jobs for Singaporeans, but lower skilled foreign workers also help keep companies, and employment, in Singapore, Deputy Prime Minister Lee Hsien Loong said yesterday.
But he hinted at further changes to the foreign worker levy scheme: 'I think we can rationalise and smooth out our system a little bit more.' He was responding to a question yesterday on how Singapore reconciles its foreign worker policy with rising unemployment.
He said: 'We have to reconcile ourselves to the reality of life which is that we are facing competition and having a certain proportion of foreign workers is very helpful for companies to be in Singapore.'
If Singapore didn't have foreign workers, 'it is not automatic that the jobs will just go to a Singaporean', he added. '(If companies) can't find the right Singaporean (for the job), they will go somewhere else.'
He cited the example of graveyard shifts, which Singaporeans are reluctant to work. 'It is not a question of pay. You just can't get the Singaporeans to do it.'
But capital-intensive plants need to operate round-the-clock to cover their depreciation costs, he said. 'So, by having the foreign workers in, we are actually creating jobs in the first and second shifts for Singaporeans, which will otherwise not be there.'
But he added: 'It doesn't mean we are letting in foreign workers totally without constraint.'
For example, while the Economic Review Committee (ERC) reaffirmed the need to keep Singapore's doors open to foreign workers, it also said: 'We must carefully manage the inflow to benefit our economy and our people.'
An appropriate levy will regulate the demand for foreign workers, and ensure that they complement rather than displace Singaporean workers. This will ultimately create more jobs for Singaporeans, it said.
Tan Khee Giap, associate professor at the Nanyang Technological University, noted that Singapore needs to have foreign workers, even in a full employment situation. 'There are only 80,000 (Singapore residents) unemployed and 750,000 foreign workers here. The 80,000 cannot fill all the gaps,' he said.
But the current foreign worker policy could be more market-oriented, he suggested. Instead of quotas, the government could set fixed levies and give more leeway to employers to decide how many foreign workers to employ, he said.
Currently, the Ministry of Manpower sets different levies for skilled and unskilled workers in each sector. It also sets dependency ceilings (the proportion of foreign workers in a company) or ratios (X foreign workers to Y local workers).
The relook at the foreign worker levy comes at a time when structural unemployment is becoming a problem. 'I don't think we are going to go back to a position where unemployment will go down to one or 2 per cent like before 1997,' said Mr Lee yesterday.
To tackle this problem, the government will train workers to stay employable, help the unemployed find jobs and assist those who cannot find employment, he said. But the ERC rejected the proposal of unemployment insurance, saying such schemes are tough to implement and may lead to an erosion of the work ethic.
Mr Lee said the government will refine its assistance schemes to help those most in need of help and who have made the effort to help themselves. 'You have to make an effort. If you just sit at home and say: 'Well, I'm waiting for something to come', then you will have to wait,' he said.
Subscribe to:
Posts (Atom)