Government will help businesses transform, reduce reliance on foreign manpower: Indranee Rajah

Government will help businesses transform, reduce reliance on foreign manpower: Indranee Rajah

Speaking on radio station 938Now's Talkback show, the Second Minister for Finance and Education said automation can help businesses cut down on their manpower costs.

Indranee Rajah talkback
Second Minister for Finance and Education Indranee Rajah on 938Now's Talkback radio show on Feb 19, 2019. 

SINGAPORE: It is not possible to continuously be relying on foreign labour in increasing numbers, said Second Minister for Finance and Education Indranee Rajah on Tuesday (Feb 19), adding that the Government will help businesses transform and innovate in line with this.

Ms Indranee, who is also Minister in the Prime Minister's Office, was speaking in response to a caller on radio station 938Now's Talkback show, in which she took questions related to this year's Budget. 

The caller had pointed out that lowering the foreign worker quota in the services sector, a move announced by Finance Minister Heng Swee Keat on Monday, would make it even more challenging for food and beverage outlets to "survive". 

As it is, it is "very difficult" for such companies to find staff, said the caller.

As part of his Budget 2019 statement, Mr Heng had announced measures to ensure that Singaporeans continue to have "good jobs and opportunities". 

Among them was the reduction of the Dependency Ratio Ceiling (DRC), which sets out the maximum permitted ratio of foreign workers to the total workforce that a company is allowed to hire, in the services sector.

READ: Budget 2019 - Foreign worker quota in services sector to be cut to 35 per cent by 2021

READ: 7 things you need to know abut Budget 2019

This would be done in two steps: From 40 per cent to 38 per cent on Jan 1 next year and to 35 per cent on Jan 1, 2021.

Ms Indranee agreed that the F&B sector can be “particularly challenging” and is a good example of an industry that needs to restructure.

“We understand that it’s not easy,” she said, pointing out that automation, such as the use of conveyor belts in sushi restaurants, can help businesses cut down on their manpower costs.

“It will differ depending on what type of F&B you are doing,” she said. “But the intent of this Budget is to help small businesses make that transformation ... how to automate, how to use innovation so you won’t be so reliant on foreign manpower.”

Ms Indranee stressed that the Government wants to help businesses with this. 

“We want to help them think through their business model, how they can do it in a way which is more efficient, reduces their manpower costs and lets them increase their own productivity,” she said.

REASSURING THE MERDEKA GENERATION

Speaking to Channel NewsAsia following the show, Ms Indranee also spoke about the S$8 billion Merdeka Generation Package (MGP), pointing out that the thinking behind the MGP was to reassure the Merdeka Generation – Singaporeans born in the 1950s –  that they will be supported if they incur healthcare costs and have healthcare-related needs in the future.

Responding to a question on why many of the benefits of the MGP are healthcare-related, Ms Indranee said possible future healthcare costs is one of the “most pressing things on people’s minds” when they reach “a certain age”.

READ: Merdeka Generation Package - What you need to know

“They might not be incurring it now, but they’re looking forward into the future and seeing ... 'well, if I incur costs, what might happen',” she said. “We wanted to give them reassurance.

“What the MGP does is it gives you reassurance and the knowledge that when you get older, if you do have illnesses, there is this money that is ring-fenced for you.”

First announced by Prime Minister Lee Hsien Loong in his National Day Rally speech in 2018, the MGP is meant for the Singaporeans who “played a critical role” in the nation’s development and came together to forge its multicultural, multiracial society.

The key highlights of the package, the details of which were fleshed out by Mr Heng in his Budget statement, include a MediSave top-up of S$200 each year for five years starting from 2019, as well as additional subsidies for outpatient care for life. 

For the latter, special Community Health Assist Scheme (CHAS) subsidies for common illnesses, chronic conditions and dental conditions will be given to all in this demographic, regardless of income.

READ: Budget 2019 - More support for lower-wage, older workers; enhanced CHAS subsidies at GPs

Ms Indranee had also taken questions about the MGP on air, with some callers asking how the Government could afford it. 

The minister stressed that the money for the MGP has been set aside and will go into a fund.

“We can afford to do that in this term of Government,” she said. “When you put the money aside, you invest it, you will earn interest on it, and with that, we anticipate that that should be enough to cover the projected cost for the MGP.”

Ms Indranee also spoke about her work on the UPLIFT task force, which was set up to strengthen support for disadvantaged students. She said it would be taking steps towards better coordination and giving students a structured environment after school. 

The inter-agency task force, which is chaired by Ms Indranee, will be making their recommendations in the upcoming Committee of Supply debate.

Source: CNA/lc(hs)

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