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Oral Answer by Mr Tan Chuan-Jin, Acting Minister for Manpower & Senior Minister of State, National Development, to Parliamentary Question on the Number of Work Permits and S Passess Issued

Notice Paper No. 309 of 2012 for the Sitting on 11 Sep 2012
Questions No. 668 for Oral Answer

MP: Mr Teo Siong Seng

Question

To ask the Acting Minister for Manpower (a) whether the Ministry has monitored the number of work permits and S passes that have not been renewed and the number of new work permits and S passes issued for the last six months; and (b) what is the nett increase/decrease in work permits and S passes issued.

Answer

  1. There are three things we are juggling. Firstly, we are calibrating our foreign manpower growth via a range of adjustments to our framework and measures. Secondly, we are mindful that companies need to do well and grow for they create jobs for Singaporeans. And for companies, I don’t just mean local companies, I mean foreign companies that decide to base themselves here, when they actually do have decent options elsewhere as well. Lastly, we need companies to be more productive and not just depend on easy access to foreign labour. Hence, my Ministry is tracking the impact of our policies closely, including the number of Work Permits, S Passes and Employment Passes (EPs) being renewed and issued. We will release the numbers when the 2012 annual foreign workforce data is published early next year.
  2. What we can share is that there has been a higher number of EP and S Passes that have not been renewed. From 1 January 2012 to 31 July 2012, 30% of Employment Pass (EP) and S Pass applications were rejected, an increase from 26% for the whole of 2011. 29% out of the total number of rejected applications were for renewals, an increase compared to 21% for the whole of 2011. The higher rejection rates were due to:
    • The increase in EP and S Pass qualifying salaries from 1 July 2011. To give companies time to adjust, existing EP and S pass holders who were due for renewal before 1 January 2012 were given at least an additional year to meet the prevailing more stringent criteria;
    • The tightening of the educational qualifications for EPs, and with older applicants having to command a higher salary commensurate with their working experience and the quality expected of them, from 1 January 2012; and I have explained this before, this is quite a fundamental and important re-framing of the Employment Pass criteria and I think it is beginning to take effect, and I think it is important in terms of levelling the playing field for all Singaporeans as well.
    • The tightening of the S pass sub-Dependency Ratio Ceiling (DRC) from 25% to 20% of the total workforce from 1 Jul 2012, which has taken effect for all new foreign workers. However to give companies time to adjust their strategies, their existing foreign workers will have up to 30 June 2014 to comply with the new DRCs.
  3. So essentially, that is the data as of now. We will tabulate and track the figures. I think at the end of it, there will be a more complete picture when we look at the figures as a whole. But what I would say is that we need to calibrate. It’s not like turning off the tap. We all recognise that we do need foreign workers in our workforce and at different levels as what it provides is a diverse workforce, which remains important in keeping our workforce competitive. At the same time, there is a need for balance, there are different things that we need to juggle. And how do we ensure that companies continue to be viable? For them to be viable, they do need access to a diverse workforce, while at the same time being able to generate good jobs for Singaporeans, at the same time ensuring that Singaporeans remain at the core of the workforce. And you can see the tensions pulling at the different directions, and unfortunately it’s not a precise science where you can calibrate the different dials to get exactly the right kind of outcomes you want, because you don’t operate on a quota basis. It’s like COEs, I cap the number of COEs release every month. I think that’s not a direction we want to go towards; I don’t think it would be right to allocate manpower on that basis. But we use the market and some measures that we put in place, DRCs, levies, so that there is a cost to companies employing them. So as I said earlier, in combination with other measures to incentivise companies to transform, we hope that we can calibrate downwards in a much more significant way, the dependency on foreign workers and foreign talent, so that the numbers can come down, it’s much more manageable and at the same time, not affecting competitiveness, so that good jobs can continue to be created for Singaporeans.