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Squeeze SMEs on levies, already squeezed so much from land and rental prices!
Siao liao!
http://www.businesstimes.com.sg/sub/news/story/0,4574,480240,00.html?
Published March 2, 2012
Stiffer dose of levies may be on its way
By TEH SHI NING
(SINGAPORE) Foreign worker levies will probably rise further in coming years, Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam said in Parliament yesterday as he wrapped up the three day long Budget debate.
Suggestions for further differentiation of the foreign worker dependency ratio ceilings (DRC) are not workable, Mr Tharman said, but the government hears and will look into two ideas to give businesses more flexibility in hiring foreign workers, as long as they pay levies and stay within their quotas.
Responding to impassioned pleas from MPs on behalf of SMEs hit by rising business costs and manpower shortages, Mr Tharman assured the house that SMEs are a 'key concern' not only for economic policies but also from a social point of view, as they are run by and hire Singaporeans. But SMEs must 'adapt to the reality of a high-cost business location' which demands higher productivity and skills, as Singapore 'is not a low-cost business location, and will not be'.
Speaking at length about the foreign worker measures which have contributed to higher labour costs, Mr Tharman emphasised the careful calibration behind a policy phased in since 2010. 'We're not turning off the tap for foreign manpower, there's no cold-turkey treatment for our companies,' he said.
Still, he expects foreign workers levies to rise.
Mr Tharman, who is also Manpower Minister said: 'It will not be our last move. We'll have to watch how rapidly the foreign workforce grows this year, and if we need to, and as I expect it will be likely, we will have to make further moves, particularly on levies, in the years to come.'
Singapore Manufacturers' Federation (SMa) secretary general Gwee Seng Kwong maintained that the rate and magnitude of the changes are 'not ideal for companies at this point in time, in view of the economic uncertainty.'
But he and other business associations yesterday took encouragement from Mr Tharman's agreement to look into two ideas that may ease the pain of tightened foreign worker inflows.
The first is to allow companies to retain experienced foreign workers for a longer period. Keeping trained and experienced workers 'is a plus for productivity and it spares the company having to re-hire and re-train another foreign worker', Mr Tharman said.
The Ministry of Manpower is reviewing its policy to see how this can be achieved for work permit holders unable to pass stringent skills test, but who have experience and are useful to their firms.
The Singapore Contractors Association has presented similar requests to the government and president Ho Nyok Yong said contractors will be 'encouraged and thankful for some breathing space' even without knowing details. 'At this moment, we are pressed so hard from every direction, any leeway to work with will help,' he said.
The second proposal is to allow deployment of foreign staff across job duties within the firm. Rules prohibiting foreigners hired for a specific job from working in another role have been 'very strict', but more flexibility would allow a housekeeper to help out in a hotel's F&B operations during a slack period in housekeeping, or allow kitchen staff to waitress, Mr Tharman said.
The hotel industry welcomed this. 'It will certainly help the industry optimise our tight manpower resources and help to raise productivity even further,' said Margaret Heng, Singapore Hotel Association executive director.
Mr Gwee hopes this proposal to allow 'multitasking of foreign workers' will be extended to the manufacturing community. Singapore Business Federation chief executive Ho Meng Kit too, hopes it will be applied to other sectors once successfully piloted among hotels.
But SBF was 'slightly disappointed' with the decision not to further differentiate DRCs for various sectors. Mr Tharman yesterday rejected widely mooted suggestions for the quotas to be more differentiated and more lenient for sectors like construction, F&B, retail and cleaning, as ones which run counter to Singapore's economic restructuring push.
'The reality of the matter is that the most rapid growth of foreign workers has been in the same sectors that we are now asked to make exceptions for,' he said. Services and construction account for 90 per cent of the total rise in foreign workers in the last five years.
These sectors are also where Singapore's productivity lags furthest behind international leaders. The F&B sector's productivity is three quarters that of Hong Kong and 40 per cent that of New York. The retail sector here is two thirds as productive as Hong Kong and 45 per cent as productive as New York. Construction's productivity is a third that of Japan and half that of US
'So, these very same industries which cry out for more foreign workers are in fact those with the greatest scope to upgrade productivity, and to attract Singaporeans into better quality jobs.' Mr Tharman said.
Even so, Association for Small and Medium Enterprises vice-president Kurt Wee was disappointed. 'This simply indicates that there is a major disconnect to solid ground realities, again using broad brush strokes to generalise for whole industries, regardless of an individual company's size, manpower headcount and microeconomic uniqueness,' he said.
SBF's Mr Ho suggested that MOM could see if other practical measures are possible. For instance, SBF has proposed that companies which implement more productivity measures be granted higher DRCs.
Meanwhile, Mr Tharman made it clear that no effort would be spared to help SMEs. 'We're going to go out of our way to reach out to SMEs, hold their hands, work with the business associations, work with the Enterprise Development Centres, work with the CDCs,' he said. More details of this proactive stance to get SMEs to take advantage of newly enhanced productivity incentives will be discussed during the Ministry of Finance's Committee of Supply debate today.
Siao liao!
http://www.businesstimes.com.sg/sub/news/story/0,4574,480240,00.html?
Published March 2, 2012
Stiffer dose of levies may be on its way
By TEH SHI NING
(SINGAPORE) Foreign worker levies will probably rise further in coming years, Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam said in Parliament yesterday as he wrapped up the three day long Budget debate.
Suggestions for further differentiation of the foreign worker dependency ratio ceilings (DRC) are not workable, Mr Tharman said, but the government hears and will look into two ideas to give businesses more flexibility in hiring foreign workers, as long as they pay levies and stay within their quotas.
Responding to impassioned pleas from MPs on behalf of SMEs hit by rising business costs and manpower shortages, Mr Tharman assured the house that SMEs are a 'key concern' not only for economic policies but also from a social point of view, as they are run by and hire Singaporeans. But SMEs must 'adapt to the reality of a high-cost business location' which demands higher productivity and skills, as Singapore 'is not a low-cost business location, and will not be'.
Speaking at length about the foreign worker measures which have contributed to higher labour costs, Mr Tharman emphasised the careful calibration behind a policy phased in since 2010. 'We're not turning off the tap for foreign manpower, there's no cold-turkey treatment for our companies,' he said.
Still, he expects foreign workers levies to rise.
Mr Tharman, who is also Manpower Minister said: 'It will not be our last move. We'll have to watch how rapidly the foreign workforce grows this year, and if we need to, and as I expect it will be likely, we will have to make further moves, particularly on levies, in the years to come.'
Singapore Manufacturers' Federation (SMa) secretary general Gwee Seng Kwong maintained that the rate and magnitude of the changes are 'not ideal for companies at this point in time, in view of the economic uncertainty.'
But he and other business associations yesterday took encouragement from Mr Tharman's agreement to look into two ideas that may ease the pain of tightened foreign worker inflows.
The first is to allow companies to retain experienced foreign workers for a longer period. Keeping trained and experienced workers 'is a plus for productivity and it spares the company having to re-hire and re-train another foreign worker', Mr Tharman said.
The Ministry of Manpower is reviewing its policy to see how this can be achieved for work permit holders unable to pass stringent skills test, but who have experience and are useful to their firms.
The Singapore Contractors Association has presented similar requests to the government and president Ho Nyok Yong said contractors will be 'encouraged and thankful for some breathing space' even without knowing details. 'At this moment, we are pressed so hard from every direction, any leeway to work with will help,' he said.
The second proposal is to allow deployment of foreign staff across job duties within the firm. Rules prohibiting foreigners hired for a specific job from working in another role have been 'very strict', but more flexibility would allow a housekeeper to help out in a hotel's F&B operations during a slack period in housekeeping, or allow kitchen staff to waitress, Mr Tharman said.
The hotel industry welcomed this. 'It will certainly help the industry optimise our tight manpower resources and help to raise productivity even further,' said Margaret Heng, Singapore Hotel Association executive director.
Mr Gwee hopes this proposal to allow 'multitasking of foreign workers' will be extended to the manufacturing community. Singapore Business Federation chief executive Ho Meng Kit too, hopes it will be applied to other sectors once successfully piloted among hotels.
But SBF was 'slightly disappointed' with the decision not to further differentiate DRCs for various sectors. Mr Tharman yesterday rejected widely mooted suggestions for the quotas to be more differentiated and more lenient for sectors like construction, F&B, retail and cleaning, as ones which run counter to Singapore's economic restructuring push.
'The reality of the matter is that the most rapid growth of foreign workers has been in the same sectors that we are now asked to make exceptions for,' he said. Services and construction account for 90 per cent of the total rise in foreign workers in the last five years.
These sectors are also where Singapore's productivity lags furthest behind international leaders. The F&B sector's productivity is three quarters that of Hong Kong and 40 per cent that of New York. The retail sector here is two thirds as productive as Hong Kong and 45 per cent as productive as New York. Construction's productivity is a third that of Japan and half that of US
'So, these very same industries which cry out for more foreign workers are in fact those with the greatest scope to upgrade productivity, and to attract Singaporeans into better quality jobs.' Mr Tharman said.
Even so, Association for Small and Medium Enterprises vice-president Kurt Wee was disappointed. 'This simply indicates that there is a major disconnect to solid ground realities, again using broad brush strokes to generalise for whole industries, regardless of an individual company's size, manpower headcount and microeconomic uniqueness,' he said.
SBF's Mr Ho suggested that MOM could see if other practical measures are possible. For instance, SBF has proposed that companies which implement more productivity measures be granted higher DRCs.
Meanwhile, Mr Tharman made it clear that no effort would be spared to help SMEs. 'We're going to go out of our way to reach out to SMEs, hold their hands, work with the business associations, work with the Enterprise Development Centres, work with the CDCs,' he said. More details of this proactive stance to get SMEs to take advantage of newly enhanced productivity incentives will be discussed during the Ministry of Finance's Committee of Supply debate today.
