SMEs hope for more short-term relief as they feel the squeeze

Senior Minister of State for Trade and Industry Sim Ann.
Senior Minister of State for Trade and Industry Sim Ann.

Bosses suggest adjusting ratio of S'porean to foreign workers as labour constraints bite

Small and medium-sized enterprises (SMEs) say they continue to feel the immediate pain of manpower constraints and high operating costs - issues they believe the Budget did not do enough to address.

The Government should pro- vide some relief by adjusting the 2:1 workforce ratio of Singapo- rean to foreign workers, SME bosses argue.

The views were expressed yesterday at a panel discussion where Ms Sim Ann, Senior Minister of State for Trade and Industry as well as Culture, Community and Youth, listened to the concerns of some 300 SME owners.

One of them, Mr Nick Lee, questioned why the Government has not loosened the foreign worker levies for industries in which Singaporeans clearly do not wish to work.

This year's Budget saw the deferring of foreign worker levy hikes for the marine and process industries, but there was no levy reduction across the board.

In response, Ms Sim reiterated the Government's long-held decision to make sure Singaporeans make up two-thirds of the workforce, with foreigners making up the rest.

DIFFERENT PERSPECTIVES

As the Government, we are very conscious of this sentiment among businesses. But in our conversations with residents - especially those not in the business sector - many have said that we could do with fewer foreigners.

SENIOR MINISTER OF STATE FOR TRADE AND INDUSTRY SIM ANN

But some flexibility on this front would help alleviate the near-term squeeze that SMEs are experiencing, said Mr Kurt Wee, president of the Association of Small and Medium Enterprises (Asme).

"We don't want to become like Dubai - with a ratio of one local (worker) to nine foreigners - but it is not inconceivable that, as we have further developed our infrastructure, we can consider a ratio of one (Singaporean) to two (foreign workers)," he said.

Mr Wee said the Government can adjust this gradually, while maintaining the current strict control over work permit and S Pass applications, so as to "give businesses a bit of breathing space".

The suggestion won significant backing in a show of hands when the audience were asked whether they think the Government should consider loosening the ratio.

Ms Sim said the Government is constantly exploring the balance between giving businesses enough workforce supply and ensuring infrastructure is not strained.

"As the Government, we are very conscious of this sentiment among businesses. But in our conversations with residents - especially those not in the business sector - many have said that we could do with fewer foreigners.

"I hope there will be more public discussions on this issue, because the perspectives haven't really met one another… Businesses are key to Singapore's future. Understanding that there is a business perspective to how we organise our society is very important."

Panellists urged SMEs to approach the 12 SME Centres islandwide to seek business solutions.

The SME Centres are one-stop destinations offering a range of services, including workshops on capability upgrades and advice on government schemes. They are supported by Spring Singapore but operated by trade chambers such as Asme or the Singapore Chinese Chamber of Commerce and Industry. Spring assistant chief executive Chew Mok Lee said the centres together serve about 36,000 SMEs a year.

A version of this article appeared in the print edition of The Straits Times on March 15, 2017, with the headline 'SMEs hope for more short-term relief as they feel the squeeze'. Print Edition | Subscribe