Budget 2013: Foreign worker levies to go up, quotas for services and marine sectors cut

Foreign worker levies will go up across the board from July 2014, and July 2015. The increases will be most significant in sectors where producitivity growth is weak and the growth of the foreign workforce is significant, Deputy Prime Minister Tharman Shanmugaratnam said in his Singapore Budget 2013 on Monday.

Singapore Budget 2013 will also cut the foreign worker quotas for the services and marine sectors, which means that restaurants, retail shops and marine engineering firms will soon have no choice but to hire fewer foreigners.

The quota for the services sector will be cut from 45 per cent now to 40 per cent from July this year. Companies in the sector, such as restaurants and retail shops, will also have their S pass quota cut from 20 to 15 per cent. S pass holders are mostly junior executives earning more than $2,000 each month.

For the marine sector, the number of foreign workers a firm can hire for each local will be cut from five to 4.5 in January 2016. It will fall further to 3.5 foreigners per local worker in 2018. There is no change in the foreign workers quotas in the manufacturing, construction and process sectors.

Source: Ministry of Finance

The tightening of foreign worker policies is the first plank in the Government's Quality Growth programme, aimed at helping businesses to upgrade, create better jobs and raise wages.

From July 1 this year, the Manpower Ministry will also raise the qualifying salary for S Pass holders from $2,000 to $2,200 per month. There will also be a new tiered system which will mean that older and more experienced S-pass applicants will need to qualify at higher salaries. This will help level the playing field for local workers in the same jobs, Mr Tharman said.

The Manpower Ministry will also continue to tighten eligibility requirements for the Employment Pass workforce, especially Q1 pass holders. In the longer term, it will put in place a framework to ensure that firms give fair consideration to Singaporeans in their hiring practices.

For more news and analysis on Singapore Budget 2013, click here for ST's Big Story coverage.

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