Foreign Worker Levy Rates

Debated in Parliament on 14 Jan 2013.

Summary written by AI (learn more)

Tan Su Shan asked whether the foreign worker levy could be adjusted based on a sector's strategic importance and its reliance on foreign workers, considering the impact on local inflation.
Tan Chuan-Jin explained that the levy is a pricing mechanism to manage foreign worker numbers, with planned increases until July 2013 to encourage a shift away from labor-intensive growth toward technology and productivity.
He noted that levy adjustments consider factors like productivity gains, foreign worker growth, and local wages, with higher increases for sectors that rely heavily on foreign workers and have stagnant local wages.
The government acknowledged potential inflation concerns but emphasized sending a clear signal to companies to restructure, while offering support through measures like Innovation and Capability Vouchers and the Productivity and Innovation Credit.

Questions identified by AI (learn more)

Full Transcript

Tan Su Shan

Ms Tan Su Shan asked the Acting Minister for Manpower whether the Ministry will consider adjusting the foreign worker levy rates according to the sector's strategic importance to the local economy and the sector's dependence on foreign workers, taking into account the impact this has on local inflation rates.

Tan Chuan-Jin

The Foreign Worker Levy (FWL) is one amongst several levers used to manage the number of foreign workers (FWs) in Singapore. It operates as a pricing mechanism. Given our physical infrastructural constraints, and the restructuring of our economy to grow in a manner that can be less reliant on manpower, we have announced a schedule for FWL increases until July 2013. Raising the cost of foreign labour will encourage companies to consider investing in technology or equipment, which they would be more hesitant to pursue, if the cost of getting more workers is cheaper than the cost of capital. Singapore has reached a stage where we need to move away from a labour-intensive mode of growth which is not sustainable. There are several factors that we considered in adjusting FW levy rates; whether productivity has improved, the rate of FW growth, and local wages. Sectors that continue to rely heavily on FWs have stagnating wages for locals, or, with the greatest scope for productivity improvements, have been subjected to higher FWL increases.

We are aware of the concerns that FWL increases could have an impact on domestic inflation. However, we need to send a clear signal to companies that do not choose to restructure and continue to rely heavily on FWs for their business operations. The Government will also continue to provide assistance to companies that are motivated to embark on productivity improvements. We have already introduced several measures to help these companies, such as

Page: 174

through the Innovation and Capability Voucher, and the Productivity and Innovation Credit. These measures help to moderate some of the cost pressures that companies face, and ease their transition towards raising overall productivity.

Summary written by AI (learn more)

Tan Su Shan asked whether the foreign worker levy could be adjusted based on a sector's strategic importance and its reliance on foreign workers, considering the impact on local inflation.
Tan Chuan-Jin explained that the levy is a pricing mechanism to manage foreign worker numbers, with planned increases until July 2013 to encourage a shift away from labor-intensive growth toward technology and productivity.
He noted that levy adjustments consider factors like productivity gains, foreign worker growth, and local wages, with higher increases for sectors that rely heavily on foreign workers and have stagnant local wages.
The government acknowledged potential inflation concerns but emphasized sending a clear signal to companies to restructure, while offering support through measures like Innovation and Capability Vouchers and the Productivity and Innovation Credit.

Questions identified by AI (learn more)

Foreign Worker Levy Rates

Debated in Parliament on 14 Jan 2013.

Summary written by AI (learn more)

Tan Su Shan asked whether the foreign worker levy could be adjusted based on a sector's strategic importance and its reliance on foreign workers, considering the impact on local inflation.
Tan Chuan-Jin explained that the levy is a pricing mechanism to manage foreign worker numbers, with planned increases until July 2013 to encourage a shift away from labor-intensive growth toward technology and productivity.
He noted that levy adjustments consider factors like productivity gains, foreign worker growth, and local wages, with higher increases for sectors that rely heavily on foreign workers and have stagnant local wages.
The government acknowledged potential inflation concerns but emphasized sending a clear signal to companies to restructure, while offering support through measures like Innovation and Capability Vouchers and the Productivity and Innovation Credit.

Questions identified by AI (learn more)

Full Transcript

Tan Su Shan

Tan Chuan-Jin

Page: 174

Summary written by AI (learn more)

Tan Su Shan asked whether the foreign worker levy could be adjusted based on a sector's strategic importance and its reliance on foreign workers, considering the impact on local inflation.
Tan Chuan-Jin explained that the levy is a pricing mechanism to manage foreign worker numbers, with planned increases until July 2013 to encourage a shift away from labor-intensive growth toward technology and productivity.
He noted that levy adjustments consider factors like productivity gains, foreign worker growth, and local wages, with higher increases for sectors that rely heavily on foreign workers and have stagnant local wages.
The government acknowledged potential inflation concerns but emphasized sending a clear signal to companies to restructure, while offering support through measures like Innovation and Capability Vouchers and the Productivity and Innovation Credit.

Questions identified by AI (learn more)

Foreign Worker Levy Rates | PAPERCUTS

Foreign Worker Levy Rates

Summary

Questions Identified

Full Transcript

Tan Su Shan

Tan Chuan-Jin

Summary

Questions Identified

Foreign Worker Levy Rates

Summary

Questions Identified

Full Transcript

Tan Su Shan

Tan Chuan-Jin

Summary

Questions Identified