SINGAPORE — The Government will be reducing the quota for skilled foreign workers in the construction, marine shipyard and process sectors over the next three years to encourage firms to hire more Singaporean skilled workers and technicians.

Deputy Prime Minister Heng Swee Keat announced during his Budget speech on Tuesday (Feb 18) that the dependency ratio ceiling (DRC) relating specifically to S-Pass holders will be cut from the current 20 per cent to 18 per cent on Jan 1, 2021, and to 15 per cent on Jan 1, 2023 for these three industries.

The overall DRC, which refers to the overall foreign work quota across all classes of work pass, however, remains the same at 87.5 per cent for the construction and process sectors, and 77.8 per cent for the marine shipyard sector.

This means that companies in these sectors can hire more low-skilled foreign workers, or work permit holders, as only the quota for skilled foreign workers is being cut.

The process sector includes petroleum and petrochemical manufacturers.

“We are announcing the changes about a year ahead, to give time for enterprises to adapt,” said Mr Heng, who is also Finance Minister.

He added that the Government intends to tighten the number of skilled foreign workers in the manufacturing sector, but only “when conditions allow”.

As the manufacturing sector has been contracting due to economic uncertainties, he said that the Government has decided not to reduce its foreign worker quota at this point.

The foreign worker levies for all sectors, including tourism, food and beverage and retail sectors, which have been hit hard by the Covid-19 outbreak, will remain unchanged. 

The cuts in skilled foreign worker quotas in these sectors come after Mr Heng announced similar measures for the services sector during last year’s Budget.

The number of S-Pass holders in the construction, manufacturing, marine shipyard and process sectors has been growing by 3.8 per cent over the last two years, he noted, and the number could increase significantly over the next few years. 

“However, the growth in S-Pass holders must be sustainable. The Government has been working closely with industry and educational institutions to build up a pipeline of local manpower, including mid-career workers. We want them to have fair opportunities to grow, while supporting the manpower needs of enterprises,” said Mr Heng in Parliament.

The S-Pass category was created so that companies will be able to hire the skilled workers that they need but are unable to find among the local population.

“But S Passes should not be a means by which enterprises hire low-cost foreign workers, when qualified locals are available,” said Mr Heng.

As there may be concerns among companies on whether they would be able to find the skilled manpower in these sectors, he said that SkillsFuture Singapore and Workforce Singapore would work with these companies to help them match these jobs to skilled local graduates or older local professionals looking for new careers.

Companies that have specific needs can continue to apply for additional manpower flexibilities in exceptional cases, such as through schemes like the Lean Enterprise Development Scheme.