S Pass workers may face tightening measures: Tan Chuan-Jin

SINGAPORE: The government may tighten measures to check the inflow of foreign workers with mid-level skills.

Acting Manpower Minister Tan Chuan-Jin said he will provide an update on this as early as the first quarter of next year.

He hinted that foreign workers in the S Pass category may face further tightening measures as early as the first quarter of 2013.

S Pass holders are mid-level workers earning at least S$2,000 a month.

Statistics from the Manpower Ministry showed that the number of S Pass holders rose from nearly 114,000 last year to about 128,000, as of June this year.

For the first half of this year, the number of Employment Pass holders dipped from 175,400 to 174,700.

Mr Tan said it is likely that companies are using S Passes to bring in more junior-level professionals, managers and executives (PMEs).

He said: "I've mentioned before the S Pass is a sector we are not totally comfortable with, because there's a lot of transference of Employment Passes into S Passes and we are now exploring measures to perhaps tighten that segment."

Speaking at the Small and Medium Enterprise (SME) convention on Thursday, Mr Tan explained the government is neither trying to close the tap completely nor reducing the current numbers.

"The tap was turned on and running in the past, at a fairly fast-flowing rate," said Mr Tan.

"The tap continues to run, but what we've done is to actually turn the tap to move at a much slower pace that we think is sustainable."

The government has always been moderating the increases to a sustainable rate, one that enables businesses to grow, he said.

Mr Tan said his ministry will continue to listen to feedback from businesses and exercise flexibility where possible, as long as it does not compromise Singapore's long term objectives.

He also assured businesses the government will manage the pace of manpower tightening carefully.

Mr Tan noted that if tightening is too aggressive, many businesses will fold and if it is too slow, the economy will lose the momentum for change, so a careful balance is needed.

To moderate the impact on companies, the government makes incremental changes and announce these changes early and provide time for companies to adjust.

Mr Tan also explained why the government tightened foreign worker supply.

He said Singapore cannot continue to rely on low-cost foreign labour to grow the economy.

The price advantage that companies offer cannot be based just on lower cost, as Singapore cannot out-compete its neighbours, who will always have more ready access to low-cost labour.

Mr Tan also said over-reliance on low-cost labour imposes hidden costs on the economy and on the society.

It reduces motivation to innovate, raise productivity and move up the value chain.

Mr Chan Chong Beng, the president of Association of Small and Medium Enterprises (ASME) said: "If (companies) want to survive, these are the realities they have to face. Asking for more workers is out of date."

He added: "So I think SMEs should give up that idea and look forward to the next level of support that the government can give and look very carefully again to productivity because this is the only way for them to survive in time to come."

Mr Tan said the government will continue to support SMEs to grow by being more productive.

Early findings from a recent study commissioned by the National Productivity and Continuing Education Council (NPCEC) involving 263 SMEs showed many know what kind of support is available.

While more than nine on 10 SMEs polled were aware of the government productivity drive, only slightly more than one in 10 said they eventually benefit the schemes.

Some of the reasons cited include having to deal with a tedious application process.

Mr Tan said over the next few months, the government will look at how to administer such schemes better.

Mr Chan said productivity schemes should be made simpler to understand and wanted to see more government support.

"Most of the SMEs do not have cash to go into a grant and many a time they have to fork out the money," said Mr Chan.

"So, the government should also look into areas in which how the SMEs can be helped financially to kick start any grants that they have."

- CNA/ck/xq


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