Budget 2019 - Impact on Foreign Workforce

In yesterday’s Annual budget placed at Singapore Parliament, Finance Minister Mr Heng Swee Keat categorically informed to the members of parliament that from next year onwards foreigners quota in service sector would be reduced upto 5% in next 2 years timeframe. His statement has higher importance as he is tipped to take over as Singapore’s next prime minister.

Below are his statement for everyone’s consumption:

The government is adjusting the workforce quota for the services sector.

Specifically, the services sector Dependency Ratio Ceiling (DRC) will be reduced over two phases: from 40% to 38% on Jan 1 2020 and subsequently to 35% on Jan 1 2021. Firms whose existing workers are in excess of the new limits will have to adhere to the adjusted DRC as and when they apply for renewal of permits.

The services sector S-Pass Sub-DRC will also be reduced from 15% to 13% with effect from Jan 1 2020, and to 10% on Jan 1 2021.

These changes have been announced a year ahead to give companies time to prepare for them, says Heng.

In certain cases, however, firms may continue to apply for additional manpower flexibilities such as via the Lean Enterprise Development Scheme, which provides support to firms undergoing transformation projects with the aim of achieving a more manpower-lean business.

Firms may also bring in foreign workers with specialised skills that are in demand globally – albeit on a case-by-case basis, provided that these firms still face a shortage after having given fair consideration to Singaporeans.