Why the hike in Foreign Worker Levy will benefit the govt more than ordinary workers
February 24th, 2010 | 
Author: Written by Our Correspondent
The recent move by the ruling party to increase the Foreign Worker Levy will only go to increase the coffers of the government without benefiting the ordinary workers, both Singaporeans and foreigners alike.
Under the new scheme, most Work Permit holders will have their rates raised by between $10 and $30 this year while those in manufacturing and services will see their levies rise by an average of $100 at the end of the three years.
Levies for S-Pass workers will increase from the current $50 monthly to a maximum of $250 by July 2012.
The ruling party claimed that the move will deter employers from hiring foreigners and encourage them to provide more employment opportunities to locals.
If this is really its intention, then it should follow the example of Australia and make it more difficult for companies to recruit foreigners by raising the quota for Singapore workers and pegging the levy to the difference in wages between locals and foreigners.
In all likelihood, the inadequate measures taken were no more than a “wayang” to placate angry Singaporeans that it is doing something to protect their interests.
Take for example an IT enginner – a local will command a monthly pay of between $2,500 – $3,000. A company can offer a foreigner $1,500 – $1,800 and he/she will still take up the job. The maximum $250 levy for S Passes will do nothing to encourage the employer to hire a local as it will still “save” much more by employing foreigners.
Furthermore, there is no way to stop unscrupulous employers for passing the higher cost of employing foreigners to the workers themselves thereby putting them in a vulnerable position of being exploited.
For foreigners who are desperate to land a job here in Singapore, they will not protest against having their basic salaries cut just to “make up” for the hike in Foreign Worker Levy.
At the end of the day, the employers will not be affected by the hike in the levy as their profit margin will remain the same.
The same numbers of foreign workers will still be employed at a lower cost while Singapore workers continue to face discrimination in their own country.
Ultimately, it is the government which will be the greatest beneficiary as it is expected to rake in more levies from the employers.
If the government is serious about reducing Singapore’s dependence on foreign workers and to boost productivity, it should stop the issuing of S passes completely.
Foreigners on these passes usually compete directly with Singaporeans for jobs which can otherwise be taken up by them and they do not add value to Singapore except decreasing labor costs and increasing the profits reaped by their employers.
Strict restrictions should be imposed on work permit holders – only industries and sectors which are unable to employ Singaporeans are allowed to employ foreigners and for each foreigner employed, a levy amounting to the difference in pay between a foreign and local worker should be paid.
At the same time, a minimum residency period of 2 year should be mandated before foreign workers can apply for Singapore PR.
The “low” employment rate of 3 per cent for Singapore is highly misleading as both Singapore citizens and PRs are lumped together under the same category “resident”.
For purposes of clarity, the Manpower Ministry should put PRs in the “foreigner” category in all its guidelines and regulations.
Under the current rule, a company needs to fulfill a quota in the number of “local” workers (including PRs) before they can hire foreigners which is easily circumvented by companies getting earlier arrivals of foreign workers to take up Singapore PR.
As Singapore PRs are easily granted within a few months, this enables them to artificially increase the quota thereby freeing more slots to employ foreign workers.
For example, a company with a staff comprising of 20 per cent citizens, 50 per cent PRs and 30 per cent foreigners is able to meet the quota with ease though Singaporeans remain in the minority.
Some of these PRs will go on to compete with Singaporeans in other jobs after they leave their parent companies who apply the Singapore PRs on their behalfs.
An electronic firm in Singapore was known to have applied Singapore PRs for its PRC workers who are unable to speak a single word of English. Surprisingly, most of their applications are approved within a year. The marketability of these PRC workers are therefore enhanced and they have few problems finding another job in Singapore after they left the company.
The most incredible part of it all – these PRs are sent for “retraining” too under the Job Credits Scheme last year sponsored by Singapore taxpayers!
Unless wholesale changes are made to Singapore’s employment and immigration policies, the hike in Foreign Workers levy will not moderate or slow down the inflow of foreign workers into Singapore.
Perhaps that’s the real aim of the ruling party after all – to keep the foreign workers coming without jeopardizing its chances at the next general election.
Posted in Opinion
“the hike in Foreign Workers levy will not moderate or slow down the inflow of foreign workers into Singapore”
The levy was never meant to achieve that purpose. Forget the sweettalking by Tharman or the praises gushing froth from the mainstream media.
The levy is imposed to placate local Singaporeans that citizens have it better than foreigners. The hike in school fees for foreigners not long ago served this same purpose.
It’s a political move, and of course, the govt makes a quick buck on the side.
Sigapore’s population is 5 million and growing NOW. There are publicly announced plans to build taller buildings and deeper underground spaces to accomodate more people. The population will reach 6 million whether you like it or not. Fertility rates have set a new low record, so where will the extra one million people come from? Think well and draw your own conclusions.
Like or Dislike:
0 
0
great article
Like or Dislike:
0 
0
The employers can still ask these foreigners to work extra hours on Sat/Sun and they can still easily get back the moolah donated to the PAP.
Like or Dislike:
1 
0
The problem with raising levy is the same as raising the cost of employment. The final result is cost increase to employer who will in turn pass it on to the consumer. The net result is a higher cost to everyone concern. The sole benefactor of the whole exercise is the government who has a windfall, in turn it will turn into bonuses for its own PAP people.
Having said that, what is the solution for such a challenge, the salary disparity of foreign workers and local workers?
Raising cost will deepen social problem especially the poor. Those who does not have much money will still need to buy food and necessity. The government needs to do something at this end of things so that the other end of things will adjust accordingly. There must be control to bring the cost of things down for the poor consumers. If the cost of everything is low then people with lower salary will not suffer so much even when their earning is not so fantastic.
If the cost of living in Singapore come close to the cost of living in India and China, then Singapore workers can compete with these foreign workers. Our people has to bear a higher cost of living and earning exactly the same with foreigner workers is still unfair to our local workers. Moreover foreign workers with no family commitment inside Singapore can work longer hours than a local who has to look after his or her family.
Lets get to root of the problem and solve it properly.
Like or Dislike:
0 
0
Well,if the government is sincere at all in trying to STOP or REDUCE the influx of foreign workers,the only way is to make the levy s high that it is no longer feasible for greedy employers-tlc n glc included- to engage the services of these foreigners.
On top of that,as mentioned by Anonymous,no manipulation of working hours is to be allowed if the government honestly wants to help locals and a genuine work-life balance would also lead to better quality rest and recreation for workers and thus,might lead to higher chances of child-bearing and in the process,help alleviate ageing population problems.
Like or Dislike:
0 
0
1. Prosper app and pap government for yet another pappy BOTCH pappy policy run FOUL???
2. Thus another of their proactive and long delayed and late Futile Tackle TO-FIX another failure to be. As with Singapore so small and compact like a little child…
ISN’T IT EASY to just hold it’s small hand and LEVERAGE on like a child’s LIGHT WEIGHT In Smallness and so SUPPLENESS too!!! And then BOAST like an Egoistic Adult of “How I’ve taken care of and manage THIS child’s fall NOT OF My MAKING”???…
IS THIS THEN The Very kind of government with mentor to show for how visionary and pragmatic they are in dishing out… ‘deliciously for themselves” and consistently to Fashion out for us to believe how ABLE ACHIEVERS ‘they are’??? What much ADO about NOTHING”… Concrete that is as a belated proactive move once more eh!!!!… Let’s anticipate and watch out for they next tweaking to make another U-u-turn in time to come as goons always knows best right!!! What more and else to add leh!!!
Like or Dislike:
0 
0
We are the only country where the garman wants us to be cheaper , better and faster but the standard of living not in syn at all . Papaya must do the following :-
1 ) cheaper , faster , better transports ( MRT & BUS )-failed
2 ) cheaper , faster , better housing – failed
3 ) cheaper , faster , better education – failed
4 ) cheaper , faster , better hospitals – failed
6 ) cheaper , faster , better MPs ,PM,SPM , MM – BIG failure
Like or Dislike:
1 
0
Isn’t it going to depress the potential Singaporean workers salary even further, if the foreign workers are okay to accept lower pay because of this increase in levy? hmmm…
Like or Dislike:
0 
0
Aiyah this gahmen do anything also must end up making money, really sick
Like or Dislike:
1 
0
ICA will be very busy converting as many foreigners as possible into PRs!!!
Lelong lelong….S’pore PR toilet paper for free.
Expect a HUGE surge in the number of PRs or new citizens!!!
Like or Dislike:
1 
0
Doesn’t anyone realise that this government just cannot bite the bullet, while telling the citizens always to do so? There are ups and downs elsewhere in the world. Yet you will never see the “real” down over here in Singapore as everything is artificially propped up. One more crisis will bring everyone back to reality and Singapore on its knees to the rest of the world. By then, those who have milked the system will be long gone.
Like or Dislike:
0 
0
Think the gaman is missing the point again. Why go put a levy on jobs that Singaporeans avoid (e.g. construction workers)? Just get to the point and put levy on PR instead.
Like or Dislike:
1 
0
All solutions from PAP = Make money while “appearing” to have tackled the problem.
Yes, they did do something about a problem…but was the aim at solving it? Or making some quick buck on the side while looking good?
Like or Dislike:
0 
0
good article showing example how govt want to fool people. It just like saying issuing COE to control the number of vehicles. But still allowing one person to own more than one vehicles so long they are rich enough to own more than one. Then also in this way govt can gain from the profit from selling COE. So you don’t see the number of vehicles decreased but see the COE fees increased into minister’s salary.
Like or Dislike:
0 
0
My non Singaporean friends always ask me this, are your gahmen leaders all crooks why are they so devious to keep coming up with “schemes”?
In their dictionary a “scheme” is define as intrique, plot or something to undermine your interest.
Like or Dislike:
0 
0
It shows the PAP gov is half-hearted in reducing the number of foreigner in SG. That is why LKY asked Singaporeans to bear with the crowded public transport.
Surely the businessman will pass the extra cost to his employees(fw and Singaporean) and to the consumer. With rising cost of living and stagnant wage, PAP gov will bs Singaporean that foreign workers help to keep cost of living low.
Like or Dislike:
0 
0
This govt is absolutely pathetic and incompetent. All they want is to earn easy money without working hard. No one benefits from this increment of foreign levy except this thoroughly incompetent government.
I give up with this PAP govt. 44 years of incompetent rule. Enough no more. Get them out, the quicker the better.
Like or Dislike:
0 
0
Increase in foreign worker levy. Soon ministers can expect a beautiful salary increment. But for private sector, they say don’t expect an increment due to economy just recovering.
Like or Dislike:
0 
0
Can someone please explain to me:
Why is Singapore government’s usual method of solving any sort of problem is to increase charges/fees but the problems still remained unresolved?
Eg:
To solve inefficienicies in public transport system
Increase transport fees
Transport system still as inefficient
To solve traffic jams on the public roads
Increase ERP charges
Singapore roads still jam
To solve overwhelming nember of foreigners
Increase foreign worker levy
The prediction: The number of foreigners will still increase
Like or Dislike:
0 
0
@dunbeanidiot on Wed, 24th Feb 2010 2:30 pm
The answer is staring at your face.
Which party is in Power? PAP
PAP = Pay and Pay, its no joke they really make you pay and pay it is a fact.
Like or Dislike:
0 
0
Hello,
This a Fabainism Politics
PAP had re- modify their policies TEMPORARY to be a CROWD-PLEASER desgin to win your VOTES
After the election…
A clear mandate of 70% won, with their 2/3 majority intact, they will REVERSE their policies back to how it was before
After the election…
And the price of food, oil, sugar, GST, petrol, buses, MRT, LRT, ERP, rentals, water & electric bills…etc will go up
Fabain Warfare- its all about creating an illusion to your enemy the trumpet had been blown we are retreating our position. Actually we are re-assmbling an greater force behind the hills which you can’t see from your nake eyed
Like or Dislike:
0 
0
Vote the rotting papayas out lah.
Like or Dislike:
0 
0
Folks out there,
Go to kenneth lin petition article call and voluntarily signed up. Kick-start the agenda to make all PAPPIES regret !!!!
We had enough all of them!! The signs is already very clear. All those ministers already show their true self to all of us , singaporeans and all the FTs, PRS and foreigners!!! All those ministers in the cabinet is just milking us until we dropped dead!!! How long can u still bear with it???
Fight the battle now or else we be gone!!!! Go to kenneth lin petittion call and signed up now~!!! SUPPORT THE PETITION!!!
Make a turnover change in singapore!!!
Vote for change! Vote all pappies out!!!!
Either they are been voted out or we vote ourselves out!!!!
Like or Dislike:
0 
0
Only a fool would be lulled into buying these latest so-called changes or whatever they espouse it to be. The repercussions have been felt far and wide across Singapore and at the rate it is going it is apparent that Singaporeans are no longer of priority to the ruling party and incumbent govt. LHL is a hypocrite and so are his minions.
It is ploy and beware – Never trust a politician when his allegiance is to $$$ and the party. PAP = power N money and with the PAP it is always DOUBLETALK AND DOUBLSPEAK.
Till we undo the damage(s) of this one-party system – we are doomed lar.
Yes, vote and vote and vote them out.
Like or Dislike:
0 
0
“For foreigners who are desperate to land a job here in Singapore, they will not protest against having their basic salaries cut just to “make up” for the hike in Foreign Worker Levy.”
Totally agree with that.
As usual, the real issues are not addressed. Native Singaporeans who have not read this article will be placate and “some people” will be able to pocket extra money in the form of levies.
This is killing two birds with one stone. Only the most cunning would be able to come up with something like that.
The time taken to be converted to PR should be addressed.
What about PMETS? Seemed like this group is not specifically mentioned. The budget mentioned about “workers” – i.e. not PROFESSIONALS.
Like or Dislike:
0 
0
Those guys should aim to significantly REDUCE the number of foreigners (WORKERS or PROFESSIONALS) working in Singapore, to let’s say 20% of the workforce by the end of the year.
Why let the percentage remain the same? This is not really addressing the rising swell of hatred for foreigners in Singapore.
Like or Dislike:
0 
0
To know what is Fabian Politics?
Watch The Patriot by Mel Gisbon
The last scene, Battle of Guilford Courthouse
Mel Gisbon was outnumbers by the Redcoats. They lure those redcoats calavry & troops into baynonet charge to overtake the field by constantly retreating
Behind the hill, the main forces awaits
To win an election, they will re-modify their policy to suit you. After the election it over, they will reverse it back
This is Fabain Warfare that is also popular in Politics
Like or Dislike:
0 
0
Even if PAP lose, within one term, they will win again. Since losing so much money now, the opposition will be unpopular as they have no cash to implement policies. PAPpies will use this chance to discredit them. Look at how Republicans are gaining ground now…
Like or Dislike:
0 
0
As I have always said if U vote for LKY & his member they will always think how to put sand & stone into your rice, then U have difficult time swollow your food. It that clear!
Like or Dislike:
0 
0
Learned people have suggested that the hike in Levy could lead to lowering of citizen salaries or benefits as business will find ways to compensate for the hike.
Like or Dislike:
0 
0
@James Lai – Oppositions Priority
1) Come up with a commission to investigate / review / account for all the failed policies of the PAP. The mediacrowns, shitty times will have to be changed by liberating the media further.
2) Tell Singaporeans from day 1 what the challenges are. Tell them that the transformation from a PAP led government to one that is truely transparent, accountable will be painful.
3) Change CPF Policies – give people more say how they want to use their retirement funds.
4) Housing Policies – tell people how much PAP have been over charging them. It’s the PAP. Mah Bow Tan and Lee Kuan Yew. Tell them to remember these architects of ‘market subsidy’ that have put a nose ring on Singaporeans. Tell people what can be done to unwind these ‘blood-sucking’ policies.
5) Increase tax on the rich. Since PAP paid themselves MILLIONS they have been lowering the tax on the rich to benefit themselves and their cronies. This should be reversed.
More ….
Like or Dislike:
0 
0
Are Singaporeans being discriminated as a worker in their own country? Let’s do a simple cost calculation:- What’s the total wage cost employer has to pay for employing a Singapore worker compared to a foreign worker on Employment Pass with monthly salary of $3000?
Singapore Worker Total Wage Cost = $3000 + 3000×0.145 (Employer CPF contribution) = $3435 whereas Foreign Worker Total Wage Cost = $3000. The difference is Singapore worker cost $435 more, mutiply this with 100, it becomes 435×100=$43,500 monthly savings if employer employed all workers under EP. Who don’t want to complain loudly they cannot find Singapore worker.
In order for Singapore workers not to be discriminated in their own country, there should be some form of CPF Employment Foreign Workers Levy equivalent to current employer CPF contribution.
This should be implemented as soon as possible. It does not do the government any good with Singapore workers not being employed in the long run. The PAP government will have to bear hefy political costs if more and more Singapore workers are out of work for long time.
Like or Dislike:
0 
0
Singaporeans need to start supporting small time businesses that employs Singaporeans first. Cafes, supermarkets, stalls, shops, petrol kisoks are businesses that mostly shuns Singaporeans. We need to not support them with our hard earned money. We do NS/ICT/TAXES/SHARING OF FINITE RESOURCES and end up being worse than FT. Businesses that e.g. OLDTOWN COFFEE, GIANT, SHENG SIONG, LEVI’s, 7 ELEVEN practices are totally anti Singaporean in terms of employment. If we are wanting change, talk is cheap, action speaks louder than words. STOP SUPPORTING such businesses.
Like or Dislike:
0 
0