Delivering the Singapore Budget 2012 on 17 February 2012, Finance Minister Tharman Shanmugaratnam announced several new measures to curb Singapore’s dependence on foreign manpower.
The Dependency Ratio Ceilings (DRCs) in the manufacturing and services sectors will be reduced from 1 July 2012, from 65 per cent to 60 per cent and 50 per cent to 45 per cent respectively.
The DRC for S Passes will also be reduced from 25 per cent to 20 per cent for all sectors from 1 July 2012.
Mr Tharman explained: “From 1 July 2012, companies will not be allowed to bring in new foreign workers beyond the new DRCs. However, for their existing foreign workers, companies will be given until June 2014 to comply with the new DRCs. This two-year transition recognises that many companies would have already invested in their existing workers.”
In the construction sector, the Man-Year Entitlement (MYE) quotas will be further reduced by 5 per cent in July 2012, and levies for basic skilled workers hired outside the MYE quotas will also be raised.
About 500 manufacturing companies and 8,500 services companies are expected to be affected by the DRC changes, and most are small enterprises which will have to do with one or two fewer foreign workers.
However, Mr Tharman assured that Small and Medium Enterprises (SMEs) will get the help they need to adapt to these changes.
“We will provide significant assistance to help our SMEs adjust to these changes. However, we have to do so in a way that will promote restructuring and upgrading. This means that greater assistance will flow to those that are willing to improve productivity, design better jobs to attract local workers, and innovate in order to grow,” he said.
