ASK DPM THARMAN SPECIAL

Foreign workers: No further plans to tighten policy

THERE are no further plans to tighten the foreign worker policy unless their numbers rise well above the targeted one-third level, said Deputy Prime Minister Tharman Shanmugaratnam.

The Government, he added, is determined to cap the number at this level, even as many sectors will always need foreign workers.

Locals, including permanent residents, accounted for about 66.4 per cent of employed workers as at December 2012. Foreigners, excluding domestic workers, formed the remaining 33.6 per cent.

"Keep the ratio of foreigners in the workforce to about one-third over the long term. And if we achieve that, we won't need to tighten further," said Mr Tharman, who is Finance Minister.

He accepted that sectors such as construction, health and marine struggle to find Singaporean workers, but there is a clear need to "reduce reliance on manpower" in those sectors.

Mr Tharman was speaking to The Straits Times in a wide-ranging interview on topics such as politics, society and the economy.

Questions posed to him were generated by analysts and economists but readers of The Straits Times' Singapolitics website voted on those he should answer.

The No. 1 question was the hot topic of foreigners and whether the Government plans to tighten policy further, moves which have upset businesses.

Mr Tharman noted that the sectors which rely the most on foreign workers are also the ones with the lowest productivity compared to global leaders. Thus, they have the biggest scope to upgrade. They also tend to be those where local wages have not moved up enough.

Still, he stressed, even as the economy restructures and pain is felt across all firms, the Government is looking out for small and medium enterprises, which generate most of the jobs here.

In this year's Budget, it rolled out a $5.3 billion support package to aid firms to move up the value ladder. The bulk will go to SMEs.

"So we are providing very strong support for any SME that wants to upgrade, whether it's equipment or software or training for the management," he said.

Asked if he thought the restructuring could have started earlier, he agreed it could have.

But he explained that in the early part of last decade, as Singapore recovered from a rough patch of unemployment and weak income growth, policymakers' priority was on creating jobs.

More foreign workers were allowed in so that firms could take orders and create demand. But with easy access to labour, firms had little incentive to raise productivity, leading to stagnating wages at the bottom.

Hence the Government now has to shift course, by getting firms to raise productivity and thus lifting wages, he said.

At the middle end of the workforce, there is a "bit too much of a bulge" of foreigners and the Government's intent is to ensure Singaporeans compete on a level playing field with foreign talent for white-collar jobs.

This will be done by raising the salary requirements for foreigners in these jobs.

And for young Singaporeans starting out, especially in the financial sector, the goal has also to be to ensure they get the attention they need in career development.

On the young Singaporeans, Mr Tharman said: "Your employer must have his eye on you, to see what experience you need, what are the ways in which you can develop your career."

AARON LOW