FTAs don't give 'unfettered access' to Singapore's labour market; policies must benefit Singaporeans: Tan See Leng
SINGAPORE: In implementing Singapore's foreign worker policy, the Government's approach is based on whether it will help Singaporeans, said Manpower Minister Tan See Leng in Parliament on Tuesday (Jul 6).
He was explaining the challenges and trade-offs of Singapore's foreign workforce policies in a ministerial statement, in response to a series of questions filed by several Members of Parliament.
Non-Constituency MPs Leong Mun Wai and Hazel Poa from the Progress Singapore Party (PSP) had asked for data on the number of foreign nationals and their dependants from countries that Singapore has free trade agreements (FTAs) with.
Associate Professor Jamus Lim (WP-Sengkang) asked a similar question on the number of visas granted to intra-corporate transferees (ICT) and professionals under the India-Singapore Comprehensive Economic Cooperation Agreement (CECA).
ICTs are employees of multinational companies who are transferred from overseas offices after working for at least a year in the firm. Companies that want to fill a role with an ICT are not required to advertise the job on MyCareersFuture before submitting the work pass application.
Dr Tan said that none of Singapore's FTAs gives ICTs "unfettered access" to the country's labour market, and they all have to meet the work pass criteria set by the Ministry of Manpower (MOM).
"The ICTs themselves are subject to additional checks on their seniority, employment history, and work experience. They are also subject to more conditions in their eligibility to bring in dependants, whether they want to apply for permanent residency or future employment in Singapore," he said.
NUMBER OF WORKERS ENTERING THROUGH FTAS "VERY SMALL"
In 2020, there were 177,000 Employment Pass holders in Singapore. Among them, there were about 4,200 ICTs, of which around 500 were from India, said Dr Tan.
"The PSP has made Indian nationals coming in through CECA a focus of contention. But I am afraid they have been barking up the wrong tree," he added.
"The number of ICTs coming in under our FTAs, and in particular CECA, is a very, very small number relative to the total number of EPs. I suggest we set aside this red herring and move on to the heart of the matter."
Since becoming an NCMP, Mr Leong has repeatedly questioned the Government's foreign worker policies and whether CECA allows workers from India to displace Singaporeans' jobs.
Law and Home Affairs Minister K Shanmugam had in May invited Mr Leong to put up a motion to debate the issue in Parliament. On Jun 22, Mr Leong said in a Facebook post that the PSP will be "seeking further information from the Government at the parliamentary sitting in July in preparation for the coming debate" before deciding on a suitable time to file a motion.
"The Progress Singapore Party (PSP) feels strongly that the time to rebalance the interests of the Singaporeans vis-à-vis foreign PMETs (defined as all the work pass holders) in the job market is long overdue," he wrote on Jun 22.
WHY PROPORTION OF WORKERS FROM INDIA HAS GONE UP
One of PSP's questions was about the profile of Singapore's work pass holders and their dependants - from China, India, the United States and Australia - and the jobs they commonly hold.
Dr Tan said such statistics are not published for foreign policy reasons, but that he will share some numbers to "address misconceptions" and allow for a meaningful debate.
The top nationalities that comprise around two-thirds of EP holders have been consistent since 2005 - and they are from China, India, Japan, Malaysia, the Philippines and the UK.
The proportion of EP holders from India has increased from about 14 per cent in 2005, when CECA was signed, to 25 per cent in 2020.
The increase is not because of more favourable treatment for Indian EP holders due to CECA, but it is due to the global demand and supply of tech talent, Dr Tan explained.
"China and India, over the last decade or so, are two of the largest suppliers of tech talent. But, you would have read, China has sprouted so many unicorns and the PRC companies themselves have a huge demand of their own, so many Chinese talent decide to stay in China to work," said Dr Tan.
"India’s talent, on the other hand, they've continued to look outwards. They've also the advantage of being English speaking. This phenomenon is not unique to Singapore. It is global."
"SOCIAL FRICTIONS, ANXIETY"
Dr Tan acknowledged that an increasing concentration of these workers could "cause some social frictions and anxiety to Singaporeans".
When a single nationality becomes too prominent, that can have "a disproportionate impact" on Singapore's existing culture, or cause Singaporeans to feel less at home in their workplaces or neighbourhoods, he said.
"We have to bring in the talent and the skills to keep our economy growing, while tracking that the number of foreigners in our midst stays at a level that we are able to cope with, and manage the social frictions that will arise from time to time."
MOM takes note of firms that has a concentration of a certain nationality and puts them on the Fair Consideration Framework watchlist, then the Tripartite Alliance for Fair & Progressive Employment Practices (TAFEP) engages them to review their hiring practices, Dr Tan added.
He said that MOM will be looking to complement and strengthen the Fair Consideration Framework watchlist, and "exploring refinements" to the EP framework as announced by MOM earlier.
Dr Tan said: "The heart of the matter is this. How do we, as a small country devoid of any natural resources, remain open to global talent, for us to continue to create opportunities for Singaporeans, while, at the same time, managing the attendant social repercussions?"
Singaporeans have three concerns, he noted. First, that the growth in EP holders has come at the expense of local PMEs; second, that some workplaces have become more concentrated with a single nationality; and third, that there may be discrimination against local job seekers and employees.
On competition from foreign PMEs, Dr Tan said that Singapore has one of the best talent pools in the world but it is insufficient to meet the needs of all the investments here.
MORE JOBS CREATED FOR SINGAPOREANS THAN FOREIGNERS: DR TAN
In response to questions from Ms Poa, Assoc Prof Lim and Mr Saktiandi Supaat (PAP-Bishan-Toa Payoh), Dr Tan gave further details on the number of EPs issued by sector. EPs are given to foreign professionals, managers and executives who earn at least S$4,500 a month.
As of 2020, manufacturing and construction account for about one-tenth of EP holders here.
The rest are in the services sector. Within the top three sub-sectors, Infocomm and Professional Services account for around one-fifth (19 per cent) each, while the finance industry accounts for another 15 per cent.
From 2005 to 2020, the total number of EPs has increased by around 112,000. But over the same period, the number of local PMEs went up by more than 380,000, Dr Tan said.
"There have been questions asked, both inside and outside of this House, whether most of the growth in local PME jobs was accounted for by Singapore citizens. If you look at our unemployment statistics, we provide the figure for Singapore citizens. The citizen unemployment rate over the past 10 years has been consistently low at around 3 per cent, hence the answer must be a 'yes'," Dr Tan said.
"For those who have asked how much of this local PME job growth has gone to 'born and bred' Singaporeans, notwithstanding the divisive intent of this kind of questioning, let me state simply that the majority of this growth over this past decade went to Singaporeans born in Singapore."
Dr Tan noted the attention on the finance and infocomm sectors, which accounted for 40 per cent of the increase in EPs. "But what is even more significant is that these two sectors saw even stronger job creation for local PMEs," he pointed out.
In infocomm, the number of EPs increased by around 25,000, but the number of jobs created for local PMEs was 35,000. In finance, the number of EPs increased by around 20,000 but is outnumbered by the jobs created for local PMEs at around 85,000.
"We focused on these two sectors because they bring good quality jobs, and Singapore ... can carve out an advantage and value-add significantly in these areas. As a result, there has been significant job creation," said Dr Tan.
"As we attract foreign banks and infocomm companies to create jobs here, they inevitably need foreign workers, to complement the Singaporean workforce."
He added that it's a "misconception" to think that if foreign workers leave, the jobs they would have taken will all go to Singaporeans.
"How do I know that this is a misconception? Because today, even as we speak, we still have about 22,000 PME jobs that are not filled. Companies are desperate to fill these jobs; they would love to take in Singaporeans if they could, because Singaporeans are more productive.
"But these jobs, up to now, are still not filled. Perhaps Mr Leong would like to think deeply about that, and deliberate and offer us some advice," said Dr Tan.
If companies investing in Singapore can only hire Singaporeans, they will not base their businesses here, said Dr Tan. For Singaporeans who are displaced, the solution is to find jobs for them and not reduce the number of foreign workers, he added.
Singapore also has work pass controls to ensure that foreign workers "complement and not displace the local workforce", he said.
"There will always be calls from workers to tighten our foreign workforce policies further, just as there will always be calls from businesses to relax them ... It is a constant tightrope that MOM and MTI (Ministry of Trade and Industry) have to constantly navigate very delicately amidst highly competitive global markets for both investments and talent," said Dr Tan.
"There are limits as to how far we can tighten our controls, without eventually hurting Singaporeans. With remote working becoming more prevalent, companies increasingly do not need to site their manpower in Singapore."
Responding to Ms Poa's question on the number of foreign dependants in Singapore, Dr Tan said that the vast majority of dependents do not work during their stay in Singapore.
The number of Dependant’s Pass holders who have sought employment in Singapore via a Letter of Consent (LOC) is about 1 per cent of work pass holders, and in May, rules were changed so that dependants who wish to work in Singapore have to qualify for a relevant work pass on their own merit.
INVESTING IN WORKER RETRAINING
The Government thus tries to ensure that Singaporeans can compete strongly in an open and globalised labour market like Singapore's, a second prong of the country's strategy, said Dr Tan.
"This is why the government invests so heavily in retraining and skills development, so that displaced workers can gain new skills and reinvent themselves," he added.
"Upgrading skills and staying relevant is ultimately our workers’ best form of protection."
Highlighting that support for locals to retrain and find jobs has been stepped up during the pandemic, Dr Tan said that as of end-April, more than 110,000 locals have been placed into jobs and skills opportunities as a result of the SGUnited Jobs & Skills Package.
The Jobs Growth Incentive also supported 27,000 employers who hired 130,000 locals within the first three months of its implementation.
Total employment in 2020 shrank by 166,600, but foreign employment took the largest hit, said Dr Tan.
The foreign worker pool here shrank by 181,500 but resident employment expanded by 14,900 despite the downturn, he said.
DEALING WITH DISCRIMINATION
He also assured the House that MOM has "zero tolerance" towards discriminatory hiring practices.
Before hiring foreign PMEs, employers must first advertise on MyCareersFuture.sg, and consider all candidates in the local workforce fairly, before submitting a work pass application.
TAFEP investigates potential cases of pre-selection based on surveillance using data analytics and complaints from the public.
In January last year, the ministry increased penalties for discrimination cases and tightened requirements before firms can hire foreigners.
In response to a question from Mr Liang Eng Hwa (PAP-Bukit Panjang), Dr Tan said that over the past three years, TAFEP has handled an average of 170 nationality discrimination cases a year which arose from complaints.
The top three sectors making up about half of the complaints are wholesale and retail trade, administrative and support services, and other service activities.
"Going forward, we will do more to clamp down on employers with discriminatory employment practices," he told the House.
Dr Tan added that MOM will always be both pro-worker and pro-business, and it needs the cooperation of businesses, workers, unions and trade associations and chambers "to create win-win outcomes" for all.
"We are at a critical inflexion point in our economic development. The pandemic has caused significant economic damage the world over. We face many challenges in the post-pandemic era, but there are also abundant opportunities if we play our cards right," said the minister.
Some companies are looking seriously at investing more in Singapore, but only if they can get foreign workers to supplement the local workforce, he added.
Calling this a "golden opportunity for Singapore to pull ahead", he said: "If we can bring them in, we can continue to grow our economy for another five to 10 years.
"But if we lose this opportunity, we will not only take longer to recover, the impact will be borne by our older workers, and also by our youths who will graduate into the workforce over the next few years."