<TABLE class=msgtable cellSpacing=0 cellPadding=0 width="96%"><TBODY><TR><TD class=msg vAlign=top><TABLE border=0 cellSpacing=0 cellPadding=0 width="100%"><TBODY><TR class=msghead><TD class=msgbfr1 width="1%"> </TD><TD><TABLE border=0 cellSpacing=0 cellPadding=0><TBODY><TR class=msghead vAlign=top><TD class=msgF width="1%" noWrap align=right>From: </TD><TD class=msgFname width="68%" noWrap>kojakbt_89 <NOBR></NOBR> </TD><TD class=msgDate width="30%" noWrap align=right>1:07 am </TD></TR><TR class=msghead><TD class=msgT height=20 width="1%" noWrap align=right>To: </TD><TD class=msgTname width="68%" noWrap>ALL <NOBR></NOBR></TD><TD class=msgNum noWrap align=right> (1 of 9) </TD></TR></TBODY></TABLE></TD></TR><TR><TD class=msgleft rowSpan=4 width="1%"> </TD><TD class=wintiny noWrap align=right>29129.1 </TD></TR><TR><TD height=8></TD></TR><TR><TD class=msgtxt>Feb 24, 2010
BUDGET 2010
Hiring for jobs locals shun may get harder, say bosses
They also worry rise in foreign worker levy will increase labour costs
<!-- by line -->By Francis Chan
http://www.straitstimes.com/PrimeNews/Story/STIStory_494167.html
<!-- end by line -->
<!-- end left side bar --><!-- story content : start -->
CHANGES to regulations surrounding foreign workers, particularly the move to raise levies, are causing a stir among companies.
Bosses fear the new Budget measures will increase labour costs and make it hard to find enough staff to undertake the kind of work Singaporeans shun.
The levies will be raised gradually over the next three years to boost productivity and reduce the reliance on foreign labour by businesses.
The Ministry of Manpower (MOM) released details yesterday on how the measures affect S Pass and Work Permit holders in specific industries such as manufacturing, marine, process and services.
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.
Companies will also have to contend with changes in levy tiers.
Under the existing system, companies which employ larger proportions of foreign staff have to pay higher levies categorised by tiers.
The latest changes announced yesterday force companies to gradually reduce their proportions of foreign staff if they want to continue enjoying a lower tiered rate.
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.
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.
'For example, the fermentation process requires workers to operate in a very hot environment, which no Singaporeans would want to do,' he added.
The initial reaction of Mr Thomas Tan, chief executive of offshore oil and gas company Kim Heng Group, was that the levy increase was designed to discourage local companies from hiring foreigners.
'But very few Singaporeans want to work out in the field where it is hot and dirty, so I will need to rely on foreign labour,' he said.
Companies in the service sector such as Legend Security Services also face similar issues.
'Even if we want to employ locals, it is difficult to get them to join us,' said chief executive Randy Chua.
Most companies in similar predicaments seem resigned to the levy increases and tier changes.
But Finance Minister Tharman Shanmugaratnam said in his Budget speech on Monday that companies worried about the levy changes can turn to various government schemes for help.
These include the Productivity and Innovation Credit, the National Productivity Fund and training subsidies to help staff upgrade skills so companies can rely less on lower-skilled foreign workers.
The schemes can also help companies invest in improvements such as automating processes or training employees to lift productivity.
The Association of Process Industry (Aspri) said that while the Budget measures will impact the bottom line of its members, efforts are being made to help companies upgrade and stay competitive.
Aspri executive director Lim Jit Say said the trade association has been promoting technology innovation such as automation and giving members access to evaluation tests for their staff to ensure they hire workers with the appropriate skills.
But Mr Lim said that despite Aspri's efforts, there are still areas in the process industry where productivity improvements will be tough to implement.
'The process industry is very labour intensive, requiring thousands of mostly foreign workers, and some processes just need to be run by hand and cannot be automated,' he said.
Tai Hua's Mr Pek shared Mr Lim's view that there was a limit to the level of productivity improvements that can be made.
'In the past, the fermentation process required some 21 workers,' said Mr Pek. 'We have since cut that down to just three foreign workers - how much more can I improve on that?'
Tru-Marine group managing director David Loke had a different take, saying the levy increase for the marine sector was 'no big deal'.
'I don't think the point now is to focus on cutting labour costs. Why not focus more on increasing sales?' said Mr Loke, whose company will continue to invest in technology enhancements.
'For example, we have been exploring how we can make use of aerospace technology to help enhance repair processes in the marine sector and that will go on, whether or not the Government decides to raise levies.'
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BUDGET 2010
Hiring for jobs locals shun may get harder, say bosses
They also worry rise in foreign worker levy will increase labour costs
<!-- by line -->By Francis Chan
http://www.straitstimes.com/PrimeNews/Story/STIStory_494167.html
<!-- end by line -->
<!-- end left side bar --><!-- story content : start -->
CHANGES to regulations surrounding foreign workers, particularly the move to raise levies, are causing a stir among companies.
Bosses fear the new Budget measures will increase labour costs and make it hard to find enough staff to undertake the kind of work Singaporeans shun.
The levies will be raised gradually over the next three years to boost productivity and reduce the reliance on foreign labour by businesses.
The Ministry of Manpower (MOM) released details yesterday on how the measures affect S Pass and Work Permit holders in specific industries such as manufacturing, marine, process and services.
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.
Companies will also have to contend with changes in levy tiers.
Under the existing system, companies which employ larger proportions of foreign staff have to pay higher levies categorised by tiers.
The latest changes announced yesterday force companies to gradually reduce their proportions of foreign staff if they want to continue enjoying a lower tiered rate.
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.
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.
'For example, the fermentation process requires workers to operate in a very hot environment, which no Singaporeans would want to do,' he added.
The initial reaction of Mr Thomas Tan, chief executive of offshore oil and gas company Kim Heng Group, was that the levy increase was designed to discourage local companies from hiring foreigners.
'But very few Singaporeans want to work out in the field where it is hot and dirty, so I will need to rely on foreign labour,' he said.
Companies in the service sector such as Legend Security Services also face similar issues.
'Even if we want to employ locals, it is difficult to get them to join us,' said chief executive Randy Chua.
Most companies in similar predicaments seem resigned to the levy increases and tier changes.
But Finance Minister Tharman Shanmugaratnam said in his Budget speech on Monday that companies worried about the levy changes can turn to various government schemes for help.
These include the Productivity and Innovation Credit, the National Productivity Fund and training subsidies to help staff upgrade skills so companies can rely less on lower-skilled foreign workers.
The schemes can also help companies invest in improvements such as automating processes or training employees to lift productivity.
The Association of Process Industry (Aspri) said that while the Budget measures will impact the bottom line of its members, efforts are being made to help companies upgrade and stay competitive.
Aspri executive director Lim Jit Say said the trade association has been promoting technology innovation such as automation and giving members access to evaluation tests for their staff to ensure they hire workers with the appropriate skills.
But Mr Lim said that despite Aspri's efforts, there are still areas in the process industry where productivity improvements will be tough to implement.
'The process industry is very labour intensive, requiring thousands of mostly foreign workers, and some processes just need to be run by hand and cannot be automated,' he said.
Tai Hua's Mr Pek shared Mr Lim's view that there was a limit to the level of productivity improvements that can be made.
'In the past, the fermentation process required some 21 workers,' said Mr Pek. 'We have since cut that down to just three foreign workers - how much more can I improve on that?'
Tru-Marine group managing director David Loke had a different take, saying the levy increase for the marine sector was 'no big deal'.
'I don't think the point now is to focus on cutting labour costs. Why not focus more on increasing sales?' said Mr Loke, whose company will continue to invest in technology enhancements.
'For example, we have been exploring how we can make use of aerospace technology to help enhance repair processes in the marine sector and that will go on, whether or not the Government decides to raise levies.'
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