Sunday , July 25 2021

"We Tried for It": Chee Hong Tat Explains Tightening of Allowances for Foreign Workers in the Service Sector

SINGAPORE: Tightening the quota of foreign workers for the service sector has been a tough decision for the government "agonizing on this issue" during many talks between the ministries, senior Trade and Industry Minister Chee Hong Tat said on Tuesday. 26)

Speaking to Parliament at the end of the first day of budget debates, Mr Chee said the government was aware that this would be "painful" for the affected companies and would have an impact on industries such as accommodation, information and communications, food services, retail and professional services.

However, if nothing is done to reduce the number of foreign workers in Singapore, the situation may cause some problems.

READ: Budget 2019: The services sector will face a "challenge" for a tighter quota for foreign workers, but adjusting companies will be beneficial

Finance Minister Heng Sui Keith announced in his speech on the budget on February 18 measures to ensure that Singaporeans will continue to have "good jobs and opportunities", including a cut in the quota of foreign workers in the services sector.

This would mean a reduction in the Dependency Determination Rate (DRC), which determines the maximum permissible ratio of foreign workers to the total workforce that a company can hire – for the services sector in two steps: from 40 to 38 percent on 1 January next year and 35% on January 1, 2021.

In addition, S Pass Sub-DRC in the service sector will also be reduced in two steps – from 15% to 13% on January 1 next year, and 10% on January 1, 2021.

Referring to an editorial published in Chinese language on the day of Chinese language Liane Zakobo on February 22, Mr. Chi said that the number of S Pass holders and work permits in the service sector has increased by 34,000 in the last three years.

"The editorial article struck the nail on the head, noticing that if we do not control the total number of foreign workers, it will affect the employment outcomes of local workers and lead to socio-political problems in Singapore," he said. "We saw this happening in other countries."

That, he said, is the main reason why the government continues with tightening.

"After all, we decided that it would be better to move now to mitigate the total number of foreign workers in Singapore before the problem goes out of control," he said. "As the Zaobao edition says, tightening DRC is a bitter drug."

READ: The government will help businesses transform, reduce dependence on foreign labor: Indranee Rajah


The DRC was in the focus of a series of statements by MPs on Tuesday, voicing concern over how businesses could tackle tightening.

Nominated MP Douglas Fow, who was responding on behalf of the business community, described the budget as "a future-oriented budget that prepares and encourages Singapore businesses for the challenges and opportunities ahead."

However, he said, the plan to reduce DRC in the service sector is "a major concern" for the business community.

"For these businesses, no matter how technology can ease operating requirements, the lack of readily available human resources that will invariably increase the already rising labor costs will work in tandem to boost Singapore's business or all business. – said Mr. Fu.

READ: 7 things you need to know about budget 2019

He warned that there was "no over-reliance on legislation", stressing that in recent debates, lawmakers lobbied for mandatory progressive wage models, adult leave and flexible working hours.

"Although they are all legitimate interests, legislation about them may not necessarily be the best way to make progress. I would like to call on Parliament to better support tripartite cooperation efforts and IOM's efforts to promote a strong culture of shared responsibility, not to adopt a legalistic and prescriptive approach, "he said.

GRC East Coast MP Jessica Tan said the move to tighten the DRC has sent a strong message to companies about the need to be more productive and to rely less on foreign workers.

"We have to admit that it will not be easy for service companies because they rely heavily on human resources and are currently facing challenges in attracting Singaporeans," she added, adding that businesses must also understand that the supply of foreign workers will also decrease.

"Although it's painful and difficult if service companies do not reduce their dependence on foreign businesses so far for their business, they will be hit harder if they are not prepared for it," she said. "In order to increase the productivity of the service sector, companies will need to innovate and restructure. And we will see that some companies are struggling to make this change.

"So besides the expansion of the entrepreneurship grant and productivity grant, more needs to be done to help businesses in the service sector improve productivity and reformat their business model and strategy," she added.

READ OUT: Budget 2019: 1 billion dollars worth of measures to help businesses build "deep" capabilities

Hollander-Bukit GRC Liang Eng Hwa also said that more and more foreign workers are not sustainable both economically and socially.

He suggested that the S Pass system be structured in such a way that companies with more local workers at levels of medium to high salary and able to demonstrate a high contribution to the economy could be given more S gaps.

"We need to strengthen this link," he said, suggesting companies that have proven to hire more displaced or retired local workers to get a favorable decision to renew S Passes.

"At the end of the day, we want more S Pass jobs to be taken by Singaporeans, whether they are adults, ITEs or polyps or mothers working back."

READ: Comment: Relocation of the Singapore budget and Heng Svi Keith of the Grand Government


Some MEPs have also called for greater support for start-ups and small and medium-sized enterprises (SMEs).

Jalan Bessar MP GRC Dennis Phua noted that a differentiated approach was explicitly adopted in the 2019 budget to provide different aid for SMEs of different sizes.

She also asked how the government will be able to identify and nurture small businesses that deserve support but which can be overlooked as they are defined as micro or small businesses.

To this end, it made several proposals for further assistance to SMEs. This includes aggressively identifying, training and developing a dedicated workforce, including senior citizens and people with disabilities, and stimulating SMEs through higher special incentives for employment to hire these workers.

Anglo-Kio MP for Democracy Darryl David applauded the budget to take into account SMEs and introduced measures to help them grow. He urged SMEs to continue using the various schemes available to increase their digital solutions.

He also called on Enterprise Singapore to do more to help Singapore companies mark their mark abroad and to further improve the Made in Singapore brand on a regional and global level.

Meanwhile, the deputy for the West Coast, GRC Foo Mee Har, has released the maps of industrial transformation – sectoral transformation plans for 23 industries – noting that these ITMs cover 80% of the Singapore economy and that their progress is "central" to Singapore's economic restructuring. effort.

However, she said, although 23 ITMs have been launched, their contribution has so far been "vague".

"Earth feedback is that the key roles that industry stakeholders and trade associations and chambers (TACs) are expected to play have been uneven across industries," she said. "Too few TACs are capable of managing the development of industry-wide opportunities and helping their members reach local and international networks."

"There is an urgent need for the government to assess the partnership model and the structure of support for how government agencies, TACs, industry players, trade unions and training providers unite to accelerate the development of opportunities," she added.


In his speech, Mr Chee also talks about how governments and businesses can cope with future challenges in terms of labor-related difficulties.

To counter labor challenges, some service companies have begun to invest in productivity improvements through technology deployment and reengineering their processes, he said.

"Hard work is beginning to bear fruit and we have to keep it," he said.

He pointed out that the real added value for the actually worked hour from 2013 to 2018 increased by 4.4% per year for the accommodation industry, 3.2% per annum for retail and 1.4% per year for food services.

"These positive results are due to the efforts of our companies to bring innovations, to improve their workers and to adopt progressive working practices," he said.

"The results show that our performance measures deliver results," he added. "The key now is to spread these efforts and benefit more companies, and for the more successful to expand and expand abroad."

He also stressed that it is important for all companies to have a good understanding of technology and what they can do to improve their products, reduce costs and improve service quality.

"Technology is not everything, but if you do not use technology well, there are many things you can not achieve."

After all, Mr. Chee said he understood that the way of transformation for companies could be "a difficult and difficult task".

"State agencies and industry associations will follow along this path with you. This is our commitment to our companies, "he said.

"If you want to be transformed and you are ready to make an effort to do so, we will help you."

A total of 26 MEPs spoke on Tuesday and the debate continued on Wednesday.

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