Singapore to reduce dependency on foreign labour

 

Singapore has to make changes to the way it grows its economy as the model of relying on cheap and plentiful foreign workers to boost output is not sustainable, said Senior Minister Goh Chok Tong.

He was speaking at the Installation Ceremony of the 56th Council of the Singapore Chinese Chamber of Commerce and Industry (SCCCI) on Tuesday.

Mr Goh said Singapore has raised the Foreign Worker Levy and provided incentives for businesses to raise productivity.

He also said the government will work closely with industry associations and business chambers to help their members become more competitive by improving their business models and raising productivity.

"Some people believe that the Foreign Worker Levy will be reversed if the economy slows down. But don’t bank on it. I would like to reiterate here that the government is determined to reduce the dependency on foreign labour and raise the productivity and incomes of Singaporeans," the senior minister said.

The chamber is also heeding the government’s call to raise productivity by helping its member companies to do so.

SCCCI president Teo Siong Seng outlined the chamber’s focus for the next two years, which includes venturing to overseas markets.

Mr Teo said the chamber will help the government to promote its various assistance schemes to its member companies. At the same time, he said it will help its member companies appeal for more simplified application procedures and a shortened approval process.

Mr Teo also said the chamber has received approval from the Ministry of Trade and Industry to set up a representative office in Shanghai through a new initiative for trade associations to venture abroad.

The chamber has already signed agreements with five trade association members.

The Shanghai Representative Office will help them to liaise with their counterparts, arrange for mutual visits and provide business matching services.

SCCCI is now discussing with other ethnic chambers on collaborations with the Shanghai Representative Office.

Singapore Manpower Ministry (MOM) raised salary thresholds for foreign professionals and skilled workers

The recent move by the Manpower Ministry (MOM) to raise the salary thresholds for foreign professionals and skilled workers may do little to quell demand for these workers.

From 1 July, for professionals, the qualifying salary thresholds for the three categories of Employment Pass holders will be raised respectively —

• Q1 = S$2,800
• P2 = S$4,000 
• P1 = S$8,000

For skilled workers, to qualify for an S—Pass, an applicant’s monthly salary will have to be S$2,000 or more, up from S$1,800.

MOM said the changes were made to keep pace with increases in locals’ wages and to encourage companies to be more selective when hiring foreign talent.

The higher salary thresholds were also introduced in response to concerns from Singaporeans that foreign talent is competing with them for jobs.

PrimeStaff Management Services has a number of S—Pass and Employment Pass workers on its payroll. It said the move to raise their salary thresholds will not have a big impact.

Ronald Lee, managing director of PrimeStaff Management Services, said: "When you hire, you don’t look at people just coming at the minimum level. You look at people who fit the requirements and these people who fit the requirements could already be earning $3,000, $4,000 or $5,000. So, if you really want to hire them, that is the kind of range you’ve got to be paying them."

Recruitment companies say clients still prefer to fill their positions with local workers. However, this may sometimes be a challenge. This is because local workers still demand much more, like in terms of salary expectations.

PrimeStaff Management Services’ Mr Lee said: "They would expect a very, very high package to entice them....Therefore, we have no choice but to look (at) outside (sources). There are also a lot of equally qualified foreigners who are keen to come at a lower salary, and these foreigners are generally more committed and they have a higher staying power."

The tight labour market is also making it tough to hire.

Phillip Overmyer, chief executive of Singapore International Chamber of Commerce, said: "(In) Singapore, if you look at the (labour) market, it is fully booked! Everybody is employed, more or less. So if the economy wants to grow, you have to hire other people."

Singaporeans 2nd richest in Asia

SINGAPORE ranks fourth globally and second in Asia Pacific in terms of average personal wealth, according to the inaugural global wealth report by Credit Suisse Research.

Average wealth per adult in Singapore has grown strongly in the last decade, rising from US$105,000 (S$137,100) per adult to over US$250,000 in 2010, supported by a period of strong domestic economic growth and asset price increases.

Singapore's two-fold increase in average wealth per adult has also been accompanied by a 7 per cent slide in average debt.

From a macro perspective, the report finds that the global wealth currently held by 4.4 billion adults has increased 72 per cent since 2000 to reach US$195 trillion.