Parliamentary Speech on Foreign Workers and the Economy
Mr Speaker sir
It will be hard to wean off our over-reliance on cheap foreign labour, and that is because outdated strategic decisions made by the Government.
There are externalities for the usage of cheap foreign labour. These costs had been glossed over by the Government, such as the stress on capacity in our transport system, physical infrastructure and various social costs. Our growth model in the past 20 years was unsustainable for Singapore.
Given this state of affairs, the foreign worker dependency in Singapore is akin
to using performance enhancement drugs or addictive drugs, whichever analogy we prefer. Any developed nation can grow its manufacturing industries by introducing unlimited cheap resources such as labour.
Since the Deputy Prime Minister has already made the reduction of foreign workers a non-negotiable, I am now proposing changes to specific policy items regarding foreign workers.
Firstly, Work Permit and S-pass holders have increased steadily over the last decade. There are easily over 1 million foreign workers in Singapore. More than 20% of the entire population are made up of foreign workers. Easily more than 40 to 50% of the work force in Singapore will be made up of foreign workers. This is not healthy.
This should also be seen in the context of the Government’s apparent aim to have a population of 6.5 million some time between 2020 to 2030. Which other nations, or even city-states, depend so heavily on foreign workers?
We had created a monster of sorts in the chemicals and marine industries in particular. According to figures I had obtained from the Ministry of Manpower through this House, these specific industries have had a dependency ratio of about 1 to 5 or 1 to 7 over the last decade. This means that for every local employed, they are employing 5 to 7 foreign workers. I understand the need for foreign workers in the construction industry, but if the Minister’s reply is that no Singaporeans want jobs in the chemicals and marine industries, then why does the Government continue to pursue these industries?
Perhaps it is time to conduct an economic review and introduce restructuring measures. The entire economic growth model should be recalibrated to creating jobs for Singaporeans, not just to creating jobs in Singapore.
Secondly, I would like to revisit levies as a tool for controlling the foreign worker population. Levies push up the cost of business and the eventual victims are consumers in Singapore.
As such, I propose the following mechanisms:
a. Progressive reduction of the construction and marine dependency ratio to 1 to 3. By 2015, firms in these sectors should be completely compliant. Before 2015, firms in these sectors who comply with a 1 to 3 ratio can receive tax incentives.
b. Remove levies. Levies only increase the cost of doing business, and this cost is passed on to the end-consumer. Instead we should rely on minimum dependency ratios to control the foreign worker population.
c. In order to help SMEs overcome the difficulties in reducing foreign workers dependency, I propose the government introduce a scheme to allow 25% extra foreign worker quota above the 1 to 3 ratio over an interim period. This will help SMEs and local businesses to adjust their productivity over time. MNCs have no excuse because of their mere size and financial capacity to make such changes. MTI should also be mindful of what kinds of projects to bring into Singapore.
I would also like to ask the Minister if all firms in Singapore, regardless of size, are subjected to equal treatment for the foreign worker dependency ratio regulations across all industries. For instance, are there any existing incentives that allow larger set-ups to have exclusive use of foreign workers beyond what is allowed?
I urge the Government to execute measures to cut the foreign worker dependency as they have laid out to do. At the same time, we should extend interim measures to assist SMEs and local businesses through this restructuring exercise.
Thank you Mr Speaker.