More curbs on foreign labour

From iTODAY:

Lin Yanqin | 18 Feb, 2012 6:00 AM

SINGAPORE - Strapped for manpower, some companies here were hoping that the uncertain economy would provide some respite from government measures aimed at further reducing the Republic's dependence on imported labour.

But their hopes were dashed yesterday, as further reductions were announced in the Budget to the dependency ratio ceilings for hiring foreign manpower for the manufacturing and services sectors, along with a cut in the Man-Year Entitlement (MYE) quota for the construction sector.

The dependency ratio ceiling for the manufacturing sector will be lowered from 65 per cent to 60 per cent, and from 50 per cent to 45 per cent for the services sector. The MYE quota for the construction sector will be cut by 5 per cent.

And all sectors will be hit by the reduction in the S Pass Sub-dependency ratio ceiling from 25 per cent to 20 per cent.

In his speech, Deputy Prime Minister Tharman Shanmugaratnam noted that the economic downturn provided an opportunity to lower the dependency ratio ceilings across the board. "All firms can then take this into account in their future hiring decisions. This will help to contain our dependence on foreign workers in the long term," he said.

The new dependency ratio ceilings and MYE quota for new foreign workers take effect from July. For existing workers, companies have until June 2014 to comply.

Still, the July deadline is "too abrupt" for businesses to adjust to, said Mr Lawrence Leow, chairman of the Singapore Business Federation's Small and Medium Enterprises Committee. "It would have been more fair to maintain the status quo, given the uncertainty businesses, especially small businesses, will face this year," he said.

The announcements were greeted with consternation by businesses - in particular the construction industry - which have seen rising foreign worker levies and cuts in quotas over the past few years.

Singapore will need another 30,000 construction workers for public housing alone, with some 25,000 Build-To-Order housing units to be added this year, National Development Minister Khaw Boon Wan had said on his blog last month.

Singapore Contractors Association president Ho Nyok Yong noted that the dependency ratio ceiling reduction for S Pass holders deals the industry a double blow, as the construction sector is in need of middle-management staff, such as foremen and supervisors. "We want to hire Singaporeans, but the fact is that many are not willing to do it," he said.

Using prefabricated units - a practice the Government has been encouraging - can help to speed up construction and ease the need for manpower. "Prefab is the way to go, if contractors want to manage costs better," said Mr Ong Chong Hua, executive director of Ho Bee Group. "I see a lot of contractors adopting the methods, so I believe over time we can be less dependent on foreign manpower.

But Straits Construction director Kenneth Loo felt this would not mitigate the short-term manpower crunch: "Construction is labour-intensive ... whatever (productivity) improvements we make can't make up for the shortfall in supply at such a short notice."

Businesses in the services sector also decried the measures, noting the uncertain economic outlook. "This adds to our cost pressures at a very tough time," said Ms Christine Chan, head of human resources at Riverview Hotel. "Of course we support raising productivity, but there is a limit - it still takes a person to serve tea and coffee."

Mr Howard Lo, owner of Standing Sushi Bar, added: "I (have) been fielding requests to franchise overseas but, since I would need to send some of my staff overseas to train up the folk there, it would be hard for me to find people to fill in here in Singapore."

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