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SG Budget 2019: Workforce Quota For Services Sector To Be Reduced Over Two Years

The Singapore Government will be adjusting the workforce quota for the services sector, Finance Minister Heng Swee Keat announced today at the Budget 2019 Speech.

Made after “much deliberation”, this is in response to S Pass growth being the highest in five years, and although some firms have done well to deploy their staff efficiently, productivity growth has been uneven across centres.

An S Pass is a working visa specially designed for mid-level skilled foreigners who seek employment in industries Singapore specialises and needs skilled hands in.

Mr Heng reported that growth in S Pass and Work Permit holders in the services sector has risen by about 3% per annum in the last three years, and if the trend persists, foreign manpower growth may be on an unsustainable path.

“Relying on more foreign workers is not the long-term solution.” he said.

To give companies time to prepare, the services sector Dependency Ratio Ceiling (DRC) will be reduced over two years, from 40% to 38% on January 1st 2020, and then to 35% on January 1st 2021.

For firms whose existing workers are in excess of new limits, the DRC will apply as and when these firms apply for renewals of permits.

Measures will also be put in place till 2022 to support firms as they adjust to changes in foreign worker policies. The Enterprise Development Grant and Productivity Solutions Grant will be extended for three more years, up to March 31 2023.

As the Marine Shipyard and Process sectors have only begun showing signs of recovery, Mr Heng added that the increase in Foreign Worker Levy rates for those sectors will be deferred for another year.

Firms can still apply for additional manpower flexibilities “in certain cases”.

Feature Image Credit: Bettr Barista Coffee Academy

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