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Singapore bosses worry that hike in foreign worker levies will increase labor costs

Watchman

Alfrescian
Loyal
Singapore bosses worry that hike in foreign worker levies will increase labor costs

February 24, 2010 by admin

The recent hike in the foreign worker levies has not gone down well with some Singapore bosses who fear that the ”measures will increase labour costs and make it hard to find enough staff to undertake the kind of work Singaporeans shun.”

Faced with a potential backlash from angry voters in the next general election, the ruling party has introduced some cosmetic changes to its much maligned pro-foreigner policy to “sharpen the distinction between foreigners and citizens.”

Under the new scheme, levies will increase by about an average of $100 for each Work Permit holder – except those in construction – over three years. Rates for S Pass holders – workers with mid-level skills – will at least double from the current rate of $50 per month.

As expected, the Straits Times tried to spin a story today to win public sympathy for the affected employers.

Tai Hua Food Industries managing director Thomas Pek said the changes to levy rates and tiers for Work Permit holders will hurt the home-grown soya sauce manufacturer:

“If the Government decides to revise the levy tiers, then they should at least leave the levy rates alone and not revise both at the same time,’ said Mr Pek. For example, the fermentation process requires workers to operate in a very hot environment, which no Singaporeans would want to do,” he added.

The Straits Times followed with a misleading sentence:

“Like many others in labour-intensive industries, Mr Pek finds it hard to get locals to replace foreigners in key functions at his Jalan Besut plant.”

If Mr Pek had offered decent wages, it is highly unlikely that he is unable to find Singaporeans to work for him.

The superficial changes made to the foreign worker levies will not affect his profit margin by much. After all, he can easily pass the increased labor costs back to the workers and customers.

Singaporeans should not be deceived yet again by the ruling party’s desperate attempts to win their votes. The measures taken so far will not have any impact on the inflow of foreigners into Singapore.

Foreigners on S-passes will continue to compete directly with Singaporeans for jobs which can otherwise be taken up by them and the slight raise in levy will not deter employers from hiring them since they can get two foreign workers for the price of one Singaporean.

Furthermore, the quota rules can be easily circumvented by getting earlier arrivals to apply for Singapore PRs which are usually approved promptly.

Ultimately, it is the ruling party which will benefit most from the foreign worker levy hike and not ordinary Singapore and foreign workers.
 

Leongsam

High Order Twit / Low SES subject
Admin
Asset
Re: Singapore bosses worry that hike in foreign worker levies will increase labor cos

The businesses should simply relocate a country which has lower overheads.
 

LoveSingFade

Alfrescian
Loyal
Re: Singapore bosses worry that hike in foreign worker levies will increase labor cos

This make me very worry for the unavoidable increase in Cost of Living here, think of a cup of coffee probably increase to $1 in the heartland coffee shop, fish ball noodle $3.50 or $4.00 etc..sigh .. burden...
 

STUCK_HERE

Alfrescian
Loyal
Re: Singapore bosses worry that hike in foreign worker levies will increase labor cos

Ooooh too late! You should have thought about that when you voted for your favorite PAP. They are trying to please the voters now and enrich themselves at the same time...Sob! Sob!
 

Watchman

Alfrescian
Loyal
Re: Singapore bosses worry that hike in foreign worker levies will increase labor cos

governmentdemotivator.jpg
 

phouse3

Alfrescian
Loyal
Re: Singapore bosses worry that hike in foreign worker levies will increase labor cos

This make me very worry for the unavoidable increase in Cost of Living here, think of a cup of coffee probably increase to $1 in the heartland coffee shop, fish ball noodle $3.50 or $4.00 etc..sigh .. burden...

Please don't hoodwink yourself.

The cheapest and most delicious hawker food are usually sold by Sinkies. It is usually the owner and family members providing the unpaid labour.

On the other hand, the most expensive and unremarkable hawker food are usually sold by stalls staffed by paid workers speaking in foreign accent. The owner is also usually absent.

And if companies relocate, there will be deflation, not inflation.

The academics, the PAP and some opposition all agree that there should be growth but not growth at all costs. No one talks about collapsing the economy, not Dr. Chee when he urged the Americans to review the trade policies.

The "worst recession in 50 years" turned out to be a small dink. The PAP pressed the panic button too fast. They had to fix the economy fast due to the impending election. A few billion dollars just went straight into the pockets of the employers under the Job Credit Scheme.

Had the PAP not nanny the uncompetitive employers, the latter would have been weeded out by free market forces.

Now the PAP want to recoup some of the money by raising Foreign Worker Levies. Ironically, those uncompetitive employers that the PAP spent billions of our money to keep alive would now flee the economy, probably without saying thanks. For those who stay, it will be just another accounting exercise - money received on the left hand will be taken away from the right.

After the election, it is likely that the PAP will "fine-tune" (euphemism for lower) the levies again. GST may be raised to recoup money spent under the Job Credit Scheme. As usual, they will give the noble excuse that the peasants had benefitted from keeping their jobs.
 
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