Foreign worker levy hikes deferred for marine, process sectors

SINGAPORE — The increases in the foreign worker levy (FWL) for the marine and process sectors will be deferred for another year, after they were put on hold last year. The Government will also bring forward S$700 million worth of public sector infrastructure projects to start in fiscal year 2017 and FY2018, such as the upgrading of community clubs and sports facilities.

These measures, said Minister for Finance Heng Swee Keat, are in line with the Government’s move towards addressing sector-specific needs while providing near-term support for industries hit by cyclical headwinds.

“Given the uneven performance across different sectors, we need to go beyond general stimulus, and target specific issues faced by different sectors. For firms and sectors that are doing well, we must focus on the long term and build on the momentum to seize new opportunities ... For sectors facing cyclical weaknesses, we have introduced specific support measures,” Mr Heng said in his Budget speech.

The FWL hikes in the marine and process sectors will be deferred from July 1 this year to June 30 next year. The levy rates for work permit holders in the marine sector basic tier R1 and R2 will stay at S$300 and S$400 respectively, while rates for the process sector’s basic tier R2 and MYE (man-year entitlements)-Waiver tier R2 workers will remain at S$450 and S$750, respectively.

The increase in the FWL for the construction sector, however, will proceed as planned, to sustain the momentum for productivity improvement. Rates for basic tier R2 workers will be raised to S$700 from S$650 on July 1 as announced in Budget 2015. For the other sectors, including manufacturing and services, the levy rates remain unchanged.

The Building and Construction Authority (BCA) said last month that the total value of construction contracts to be awarded this year is expected to reach between S$28 billion and S$35 billion, higher than the preliminary estimate of S$26.1 billion for last year. Private sector construction demand this year was projected to stay between S$8 billion and S$11 billion, weighed down by economic uncertainties and the property market slowdown.

The BCA, however, expects public sector construction demand to increase to between S$20 billion and S$24 billion this year from about S$15.8 billion last year, boosted by major government-led infrastructure projects, including the second phase of the Deep Tunnel Sewerage System, the North-South Corridor and Circle Line 6.