Foreign Worker Levy increase - For or against?

[Internet Brigade]

Since we have had time to digest these suggestions and have hear all affected parties, are you for or against the tax hike?

News @ AsiaOne

Bosses on cut in foreign labour
Recommendations likely to increase business costs. -myp

Wed, Feb 03, 2010
my paper

By Esther Au Yong

They emerge after most people have gone to bed, cleaning, scrubbing and mopping into the wee hours.

Like vampires, they disappear at the first light of day.

And soon, there may be fewer of them - if foreign-worker levies are raised, as recommended by the government-appointed Economic Strategies Committee (ESC) on Monday.

Seen as a "dirty" job, cleaning work is shunned by many Singaporeans, and carried out largely by foreign workers.

The ESC proposal is part of a wide-ranging series of recommendations to better manage Singapore's overdependence on foreign workers.

Higher levies will force employers to improve the skill level of the workforce, and to rely more on technology and innovation, the ESC said.

The levies will be raised progressively, to give companies time to adjust to the changes, and to invest in developing ways of working smarter, it added.

A few industry players whom my paper spoke to lament the increase in business costs the recommendations may bring.

The head of the human resource department in a cleaning- solutions company, who wanted to be known only as Mr Teo, cautioned against a blanket ruling for all industries.

He said: "We must be very careful before the increased levy is implemented. For example, in my industry, which is very dependent on foreign labour, it might be chaotic.

"Generally, locals perceive cleaning jobs to be low-paying and they are also status-conscious."

However, he sees value in training Singaporeans to take on more leadership and supervisory roles within the company, thus improving overall productivity.

The good news for Mr Teo: skills-upgrading for low-wage workers is also a recommendation, and industries which invest in productivity training for their workers are likely to get government support.

Mr Dennis Foo, chief executive of St James Holdings, who employs foreign workers as waiters and bartenders at his nightspots, said: "For sure, cost will increase marginally and operations will be affected in the early days.

"But looking at the big picture, raising levies will force us to look at ways to be more efficient and to see how we can train local employees to be more productive.

"While businesses may have to bear the increased cost now, our economy will benefit in the long run."

The committee also recommended that the dependency ratio be tightened. This ratio, which varies across sectors, sets out the maximum number of

foreign workers that a company can hire on a work permit, or S-Pass, for each Singaporean employee.

This will encourage more prudent and efficient deployment of foreign workers, the ESC said.

Mr Mohan Mulani, chief executive of Harry's Holdings, which runs Singapore's largest pub chain, agreed: "In the past, some companies did not make the effort to upgrade the skill sets of their workers. Hiring more low-wage workers used to be the easy way out. Improving the skills of both locals and foreign workers is the way to go." Last year, 1.05 million people, or a third, of the three-million- strong workforce here were foreigners.

Despite the recommendations to limit the growth rate of the number of foreign workers, foreigners remain valuable as they take up jobs where Singaporeans are in short supply, the ESC said.

Manpower Minister Gan Kim Yong, who chairs the ESC's sub-committee on fostering inclusive growth, said yesterday: "We have to make sure that we have enough foreign workers, especially in sectors like construction, where there are not enough local workers.

"For some companies which are competitive and growing very fast, they need foreign workers to support their growth. So, balancing both ends, maintaining the current balance at one third is probably a wise decision." The ESC also recommended that the Government work with industry associations and private- sector industry leaders to raise the quality of foreign workers to support a high-productivity economy.

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[iamtalkinglah]

Since we have had time to digest these suggestions and have hear all affected parties, are you for or against the tax hike?

Then the Gov't ain't doing a good job. They can't set a general rule and apply to all situations.
Foreign worker levy could be increased for THOSE JOBS THAT SINGAPOREANS WILL BE WILLING TO DO.

 

[saratogas]

Bosses will continue to use Foreign workers until they are more expensive than a local. So Tax hike will only benefit Gov... who else?

 

[Internet Brigade]

Then the Gov't ain't doing a good job. They can't set a general rule and apply to all situations.
Foreign worker levy could be increased for THOSE JOBS THAT SINGAPOREANS WILL BE WILLING TO DO.

And how do you put that in black and white? Jobs that singaporeans are willing to do?

There are some jobs that singaporeans are not willing to do, but perhaps might be willing if the pay is improved. But surely that runs against any principle of productivity when you pay more to get less or the same output.

Also, the reason you choose to limit the increase to certain industries is because you know a levy increase is a cost to the business that they may not choose to offset with the hiring of singaporeans but instead getting existing workers to work harder.

 

[Internet Brigade]

Bosses will continue to use Foreign workers until they are more expensive than a local. So Tax hike will only benefit Gov... who else?

If thats the case, maybe the hiring of singaporeans should be incentivised instead of trying to demonize foreign workers?

 

[iamtalkinglah]

And how do you put that in black and white? Jobs that singaporeans are willing to do?

Look. No excuse from the Gov't. There are jobs that clearly could be done by a Singaporean but a PRC is doing it. I suggest you read the postings in this forum.
Why do we pay these ministers more that what US is getting? For them to resolve our problems. They have to do some form of exercise to try to identify these jobs rather than a blanket rule which is an easy way out.

There are some jobs that singaporeans are not willing to do, but perhaps might be willing if the pay is improved. But surely that runs against any principle of productivity when you pay more to get less or the same output.

Way to go! You are talking like a PAP.
Let me ask you a question, name me a country whereby 3/5 of it's population are PRs and low wage workers.
Even if these FTs are cheaper doesn't mean that we have to keep on importing them and importing them and importing them. Which developed country is doing this? For what I know, developed countries protect their citizen interest first. What I am saying is, it is too much. I agree that this runs against any principle of productivity but now we are at a situation whereby it is too much that it is taking over Singaporeans jobs.

Also, the reason you choose to limit the increase to certain industries is because you know a levy increase is a cost to the business that they may not choose to offset with the hiring of singaporeans but instead getting existing workers to work harder.

How about this? Singaporeans will leave the company and find new jobs in other countries.

Let me reiterate. I am not that smart. But I pay tax which translate to income for Gov't. Therefore they should solve our problems.

 

[cockcansing]

I believe that low skill jobs levy should not be raised but the White collar jobs or "talent" need to be raised so that the companies would think twice before getting the so called "talent" to fill them. Don't we have sufficient talent to fill in instead wasted by driving a cab.
Administration works that most locals can handle should also raised so that redeptionist should be local unlike one tread that said PRC receptionist!
If they raise the levy for the low end jobs that locals do nit wish to apply or too low of a pay to support a family should not be raised. If they do, the cost of everything will sky rocket.

 

[iamtalkinglah]

If thats the case, maybe the hiring of singaporeans should be incentivised instead of trying to demonize foreign workers?

I suggest that you read ard the postings in this forum. Below are some suggestions.

Please post CONSTRUCTIVE COMMENTS/SUGGESTION ONLY
I have thought of a possible solution to get companies to hire Singaporeans over FT.

1) Write to the newspapers (e.g. Temasek Review or ST forum or The Newpaper), whenever you experience a FT that is in a job position that clearly should be able to be done by a Singaporean. E.g. PRC doing receptionist job but cannot speak English.

It would create awareness among Singaporeans and when everyone makes noise, the Gov't will hear about this and have to do something about it. The Reform party supports for "minimum wage" policy.

2) One possible solution is to have a minimum wage policy for Singaporeans and for foreigners, they will get a lower wage but the employers need to pay a levy for the foreigners so net impact is, the same cost to hire Singaporeans (or marginally lower to hire Singaporeans) and foreigners for the Company but when using foreigners, the Singapore as a nation will get more income from the levy.

Since it is the same cost to the employer, employers will feel indifferent about hiring foreigners or Singaporeans.

I am not that smart, but those smart people such as the Gov't or the opposition party should think of a best solution for this.

And

http://www.sammyboy.com/showthread.php?t=50289

 

[saratogas]

incentivised??

Local need 1 weekday and 1 weekends off, whereas a foreign can work 6 days a week (no need what family time). Local guy needs to service NS(reservist) boss need to employ temp staff to cover, foreign no NS.

 

[iamtalkinglah]

I believe that low skill jobs levy should not be raised but the White collar jobs or "talent" need to be raised so that the companies would think twice before getting the so called "talent" to fill them. Don't we have sufficient talent to fill in instead wasted by driving a cab.
Administration works that most locals can handle should also raised so that redeptionist should be local unlike one tread that said PRC receptionist!
If they raise the levy for the low end jobs that locals do nit wish to apply or too low of a pay to support a family should not be raised. If they do, the cost of everything will sky rocket.

Yes. If that White collar jobs is so high level that employers can't find them among Singaporeans, I believe they will be willing to pay slightly more to import them. Now, they rather choose FTs.

 

[hitower]

Maybe the government should categorize into three. Do a market survey age ranging from 25 to 55 for jobs that Singaporean want and don’t want in the industry. For example: Low, Medium, High

Low: Meaning Singaporean does not want to work in this field. This field of job will not be tax in levy.

Medium: Meaning Singaporean does want to work in this field. This field of jobs should be tax in levy to be par with Singaporean expectation. So Employer should employ worker based on experience and worker contribution in the company rather than cheap labor.

High: This is the FT that Singaporean really need; however, their annual salary will be tax higher than the common Singaporean.

This is my 2 cent though what the government should do to prevent Tom, Dick and Harry into Singapore without any contribution.

 

[cockcansing]

Bro Hitower,
I think your idea is good and effective but I do not think the gov will gonna do such survey. What I see is that what they can reap in they will. As for the income tax, they do tax them but at the rate locals are paying. They should tax them like the Germans are doing to their citizens, 42% tax! That way they will think twice of coming. And I think they should also be taxed of the allowance they receive like transport and accomodation!

 

[Internet Brigade]

Im sure there are. But how do you put that in a tax policy? If you do a survey, there will definitely be a singaporean who will state his/her willingness to do a job. So in fact you need to do it for every industry.

I prefer, as you also suggested, to control the visas issued out. But you must still allow businesses to decide what is best for their business.

As for your second question. The answer is singapore, and you are a product of that policy. The same debate is running in Australia. But i agree the interests of present citizens is important. But the actions and policies are important. Businesses are mobile and can transfer operations to another country with labour and taxation laws are unfavourable. Its the inconvenient truth but this is the globalised world we live in. Increase taxes so that 2% more singaporeans will be employed in a company, and risk seeing the company shut down, resulting in 70% losing a job.

Look. No excuse from the Gov't. There are jobs that clearly could be done by a Singaporean but a PRC is doing it. I suggest you read the postings in this forum.
Why do we pay these ministers more that what US is getting? For them to resolve our problems. They have to do some form of exercise to try to identify these jobs rather than a blanket rule which is an easy way out.



Way to go! You are talking like a PAP.
Let me ask you a question, name me a country whereby 3/5 of it's population are PRs and low wage workers.
Even if these FTs are cheaper doesn't mean that we have to keep on importing them and importing them and importing them. Which developed country is doing this? For what I know, developed countries protect their citizen interest first. What I am saying is, it is too much. I agree that this runs against any principle of productivity but now we are at a situation whereby it is too much that it is taking over Singaporeans jobs.



How about this? Singaporeans will leave the company and find new jobs in other countries.

Let me reiterate. I am not that smart. But I pay tax which translate to income for Gov't. Therefore they should solve our problems.

 

[hitower]

Bro Hitower,
I think your idea is good and effective but I do not think the gov will gonna do such survey. What I see is that what they can reap in they will. As for the income tax, they do tax them but at the rate locals are paying. They should tax them like the Germans are doing to their citizens, 42% tax! That way they will think twice of coming. And I think they should also be taxed of the allowance they receive like transport and accomodation!

Hi Bro Cockcansing
Since the goverment do not want to listen. Simple, Election is near,

VOTE PAP OUT!!!

Tell them who is the boss.

 

[Cestbon]

Levy still too low. Less from $50~$450(average mostly less than $200). Stil very low compare to CPF contibution 14.5%.

 

[Watchman]

Bosses will continue to use Foreign workers until they are more expensive than a local. So Tax hike will only benefit Gov... who else?

IN the mean time foreigners will keep remitting most of Sing dollars out of Singapore in their home country . Currency drain . Spending less domestically .

Thanks to ruling parties in support of companies and those that profited from kickbacks getting a higher FT ratio .

You want domestic spending, you make sure part-timers and school leavers gets a job . That's the true health of things .

If not we just have to continue to boycott all business entities and maintain that no sector will over-come properties in years to come .

 

[iamtalkinglah]

Im sure there are. But how do you put that in a tax policy? If you do a survey, there will definitely be a singaporean who will state his/her willingness to do a job. So in fact you need to do it for every industry.

I prefer, as you also suggested, to control the visas issued out. But you must still allow businesses to decide what is best for their business.

As for your second question. The answer is singapore, and you are a product of that policy. The same debate is running in Australia. But i agree the interests of present citizens is important. But the actions and policies are important. Businesses are mobile and can transfer operations to another country with labour and taxation laws are unfavourable. Its the inconvenient truth but this is the globalised world we live in. Increase taxes so that 2% more singaporeans will be employed in a company, and risk seeing the company shut down, resulting in 70% losing a job.

1) Then do a survey for every industry? If that is too high cost, we can do it on a piece meal basis. For those obvious industry, there is no need to do any survey (such as the example that you have given). Get recommendations from the public, hear it from the people themselves. Don't the CEO talk to their field staff to get a feel of how things work in the field? They have the first hand knowledge.

2) Then careful thought must be given to it. What I have suggested is a one-sided opinion. You have made a valid comment that we must still allow businesses to decide what is best for their business. My suggestion is to get the Gov't to brain storm on the problems and again get suggestion from working professions who have the experience on this and consider carefully what they have suggested.

3) How about an example other than Singapore? Because it clearly have not worked otherwise there wouldn't be so many people complaining about it.
Believe me, this will never happen in Australia. In Australia many employers are very parochial and often prefer to recruit Australian trained and experienced employees.

You have make a valid comment which I agree right from the start. But the problem now is, it is too much. Can you respond to me? Do you agree that it is too much? Have you read about the social problems created as a result of the Gov't immigration policy?

(Businesses are mobile and can transfer operations to another country with labour and taxation laws are unfavourable. Its the inconvenient truth but this is the globalised world we live in. Increase taxes so that 2% more singaporeans will be employed in a company, and risk seeing the company shut down, resulting in 70% losing a job. )