Budget 2012 Singapore, New Influences to Business 1 – Reduced Foreign Workers DRCs
The Singapore government has recently unveiled the ‘Budget for the Future’. The Budget 2012 announcement is targeted to help improve the quality of life for the older populace who are still part of the workforce, senior citizens, lower-income and special needs Singaporeans small and medium enterprises (SMEs), the transport and tourism sector. Which programmes and initiatives will more likely to influence the future of businesses in Singapore? Let us have a look.
The government will tighten the foreign worker quota by reducing Dependency Ratio Ceilings (DRCs). The maximum proportion of foreign workers that companies in various industries can hire will be reduced starting July 2012.
Companies incorporated in Singapore or businesses in the manufacturing industry will have a 5 percent cut in DRC from 65 to 60 percent. This means that foreigners will only be allowed to fill 60 percent of the entire manufacturing workforce in the city-state compared to the previous 65 percent cap. Meantime, companies incorporated in Singapore which belong in the services sector will also experience a reduction in their foreign worker DRCs from the previous 50 percent to 45 percent. S-pass holders will also see a cut in DRC of 5 percent from the previously 25 percent to 20 percent starting this coming July.
These changes mean that the companies in the manufacturing and services industry will not be allowed to bring in more foreign workers that will result in exceeding the new ceilings. If companies exceed the new ceiling with their existing worker pool, they will be given an additional two years until June 2014 in order to reshuffle their employee make-up to fall back within the new DRCs.