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1.75 The ERC recommended that we keep our foreign
worker policies flexible, so that companies can
employ the professionals and workers they need,
especially those companies which cannot find enough
local workers.
1.76 Our policy to admit a controlled number
of foreign workers will continue to be a major
competitive advantage. These foreign workers help
to keep our manufacturing sector viable and competitive,
notably in shipbuilding and ship repair. They
reduce overall business costs and do jobs which
Singaporeans are unwilling or unable to take up.
In a factory, without foreign workers manning
the third shift, there would be no jobs in the
first and second shifts for Singaporeans. In services
too, foreign workers help many local companies
to stay in business, especially SMEs, thereby
creating more jobs for Singaporeans.
1.77 However, we need to strike an appropriate
balance between meeting industry’s needs
for affordable, skilled manpower and keeping Singaporean
workers from being displaced. The best instrument
for controlling the number of foreign workers
is the foreign worker levy. This is a price mechanism
which leaves maximum flexibility for the market
to allocate the foreign workers to where they
are most needed.
1.78 In 1999, when our economy was hit by the
Asian Crisis, the Government sharply lowered the
foreign worker levy to reduce business costs.
Since then the levy rates have stayed at the same
low level. Last December, we extended the levy
reduction until June 2003.
1.79 The Government will extend the levy reduction
for another six months, until the end of 2003.
As foreign worker numbers have remained stable,
there is no urgency to raise the levy back again.
The only exception is the levy on skilled workers,
which is now just $30. MOM will review the skilled
worker levy this year to decide whether it is
necessary to peg it at a more realistic level
next year.
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