Key Takeaways Of Budget 2019
On 18 February 2019, Singapore’s Finance Minister Heng Swee Keat delivered his Budget 2019 speech. A slew of new initiatives aimed at further improving Singaporeans’ lives and the country’s competitiveness were announced. Here, I will only touch on two key thrusts which are more relevant to small and medium enterprises such as Economics Cafe Learning Centre, a premier economics tuition centre in Singapore.
Foreign Worker Quota
To ensure “good jobs and opportunities for Singaporeans”, foreign worker quota is slated to be reduced to 35 per cent by 2021 for services sector. The Dependency Ratio Ceiling (DRC), which defines the highest ratio of foreign workers over a company’s total workforce is currently at 40 per cent. It will be cut to 38 per cent from 1 January 2020 and further reduced to 35 per cent the following year. DRCs for other sectors such as manufacturing, construction, process and marine shipyard sectors remain unchanged. The number of S Pass and work permit holders in services sector has increased by an average 3 per cent in the past 3 years, maintaining the highest growth among all sectors. Acknowledging the fact that it is not the long-term solution to rely on foreign workers, the government will further tighten its control on foreign worker inflow. Affected firms are urged to find a long-term solution by either upgrading Singaporeans’ skill sets or moving towards a “manpower lean” workforce. With guidance from your economics tutor in your economics tuition class, explain the pros and cons of various solutions. You may sign up for economics tuition with an established economics tutor to learn more. Mr Edmund Quek is an experienced economics tutor who runs an economics tuition centre in Bishan. The economics tutor has published a few economics textbooks which will be provided for free to students who sign up for his economics tuition. To find out more about this economics tutor, please visit his website at www.economicscafe.com.sg.
Firms in the services sector are given sufficient time to adapt to the changes and for firms that have exceeded the new limits, the revised DRC will only apply when they renew the permits for their staff. Foreign worker levy rates remain unchanged across different sectors with the scheduled levy increases for the marine shipyard and process sectors deferred for another year to allow these two sectors more time for recovery.
The reduction in foreign worker quota for services sector is coupled with increased investment in Singaporeans “across all stages of their lives”. Professional Conversion Programmes (PCPs) is among the measures to help PMETs make their mid-career switch and move into sectors with better career prospects. Established in 2007, over 100 PCPs have been launched across 30 sectors. Another programme, Career Support Programme which was launched in 2015 to aid Singaporeans who have been unemployed for a long time will be extended for another 2 years till 2021. In discussion with your economics tutor in economics tuition, explain the implications of foreign worker quota on the local retail sector. This topic is covered by Mr Edmund Quek, renowned economics tutor who has more than 20 years of experience in teaching economics tuition.
Deepening Local Companies’ Capabilities
A S$1 billion package combining new initiatives and existing schemes was announced by Finance Minister Heng Swee Keat. Two programmes, namely the Scale-up SG programme and the Innovation Agents programme will be launched by Enterprise Singapore to build new capabilities and seek innovation opportunities. The latter is a new 2-year pilot programme to enable customised mentorship from experienced industry experts. The government will also step up its support for the Co-Investment Fund with an additional S$100 million, on top of the S$400 million it has set aside since 2010.
More help will also be underway to ensure that firms keep abreast with the technological advances in the digital age. SMEs Go Digital programme will be expanded to cover more sectors later this year. In addition, the number and range of approved digital solutions under the Programme will also be expanded.
Jacky Liu
Economics Tuition Singapore @ Economics Cafe
Principal Economics Tutor: Mr. Edmund Quek