When Singapore’s Finance Minister Heng Swee Keat said that the Dependency Ratio Ceiling (DRC) must be lessened so that Singaporean nationals can hold on to “good jobs and opportunities,” it was clear that one of the major thrusts of government was on building new capabilities for Singaporean workers and lowering the reliance of local enterprises on foreign workers.
“Relying on more and more foreign workers is not the long-term solution,” Heng said during his speech adding that a sustainable inflow of foreign workers is essential to “complement” the Singaporean workforce.
So as to assist business organisations in familiarising themselves on the forthcoming policy changes regarding foreign workers, the government of Singapore offers the Enterprise Development Grant (EDG) which was announced in 2018 up to March 31, 2023.
This grant is designed for businesses so that they can improve their capabilities, expand business opportunities abroad and eliminate operational inefficiency.
“The reduction to the DRC is the necessary medicine in the medium term. It will force enterprises to further invest in new technology, re-skill their existing workforce, and reduce the reliance on cheap foreign labor,” said Chris Woo, Tax Leader at PwC Singapore.
The Singapore Business Federation (SBF) on the other hand, added that the tightening of the foreign worker quota was unexpected but is a clear indicator from the Government on the importance of maintaining its current policy on foreign workers so Singaporeans can continue to enjoy meaningful and well-paying jobs in the future.
Chairman Teo Siong Seng clarified to the media that the long hours and shift work associated with segments like F&B and retail “often make it challenging for establishments to hire local workers, resulting in them having to rely on foreign workers.”
“We hope companies that are most affected by the lowering can take the opportunity to examine closely how they can leverage technology to innovate and restructure or redesign jobs to make them more meaningful and attractive for local workers,” added Teo.