Budget: More industry-sensitive steps?

Economists expect easing of pressure on firms hit by foreign worker curbs

 Economists expect Monday's Budget will ease the pressure on firms hit by tough rules aimed at curbing the use of low-skilled foreign workers.

While the Government has repeatedly said its tight labour measures are here to stay, there is a feeling that it will refine its blunt instruments with more industry- sensitive measures.

DBS economist Irvin Seah has tipped that new measures will be "more targeted and less painful" while OCBC economist Selena Ling notes that the next phase of restructuring must go beyond "cost-cutting solutions" to encourage firms to "think out of the box".

Most economists believe that scheduled hikes in foreign worker levies and the lowering of dependency ratio ceilings in some sectors are unlikely to be undone. "The most benign scenario would be a pause in the pace of tightening," said Ms Ling.

And as Singapore hits the halfway mark of a 10-year productivity drive, observers have their ears peeled for the Budget to announce a new approach to raising productivity.

 

Barclays economist Leong Wai Ho expects a shift in emphasis towards employees taking ownership of productivity gains and improving their own career prospects.

"This should complement the existing, top-down approach of employers implementing training initiatives," said Mr Leong.

Ms Ling also expects schools, especially institutes of higher learning, to be roped in to help refocus the productivity push and to answer to "rapidly changing industry needs".

And as many local bosses from the retail to the construction sectors have been vocal about how carrots and sticks cannot fix their hiring woes, a cultural shift might also be on the agenda to get more young people interested in now-unpopular fields.

Deputy Prime Minister Tharman Shanmugaratnam has hinted that details of the SkillsFuture initiative will be revealed in the Budget. SkillsFuture is intended to promote greater cooperation between individuals, employers, schools and training providers.

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