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NCMP Leong Mun Wai says efforts to rebalance local-foreigner jobs ratio ‘too slow’, drawing Ong Ye Kung rebuke

SINGAPORE — To correct what he considers a “wage disadvantage” faced by Singaporean workers, Non-Constituency Member of Parliament Leong Mun Wai suggested that the Government could impose a levy on employment pass holders since efforts to rebalance the foreign-local workforce ratio are moving “too slowly”.

Transport Minister Ong Ye Kung (left) and Non-Constituency Member of Parliament Leong Mun Wai in Parliament on Feb 25, 2021.

Transport Minister Ong Ye Kung (left) and Non-Constituency Member of Parliament Leong Mun Wai in Parliament on Feb 25, 2021.

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  • NCMP Leong Mun Wai suggested imposing a levy on employment pass holders
  • He sees it as a way to reduce the wage disadvantage he said is faced by Singaporeans
  • He said that the Government’s efforts to rebalance the local-foreigner ratio are moving “too slowly”
  • Transport Minister Ong Ye Kung said that Mr Leong’s comments were grossly unfair
  • He said Mr Leong and his Progress Singapore Party are simply asking for Singapore to not be an international financial hub

 

SINGAPORE — To correct what he considers a “wage disadvantage” faced by Singaporean workers, Non-Constituency Member of Parliament Leong Mun Wai suggested that the Government could impose a levy on employment pass holders since efforts to rebalance the foreign-local workforce ratio are moving “too slowly”.

Mr Leong used the financial sector as an example of how, in his view, the rebalancing is not taking place fast enough and that localisation is not on the agenda of the Monetary Authority of Singapore (MAS), which regulates the sector.

His comments, made during the Budget debate in Parliament on Thursday (Feb 25), drew sharp rebuke from Mr Ong Ye Kung, an MAS board member, who said that the Progress Singapore Party (PSP) member's remarks were “grossly unfair”.

Mr Ong added that Mr Leong was simply asking for Singapore to move away from its status as an open economy that is an international financial hub.

REBALANCING WORKFORCE RATIO

In laying out PSP’s policy suggestions during the Budget debate, Mr Leong said that Singapore workers have a wage disadvantage because employers need not contribute to the Central Provident Fund (CPF) of their foreign workers.

This disadvantage is slightly reduced for Singaporeans competing against lower-skilled foreign workers typically holding work permits or S passes since employers of these foreign workers would have to pay a levy.

Not having to pay a levy for employment pass holders is “a loophole” that employers make use of to the disadvantage of Singaporeans, Mr Leong said.

Employment passes are issued to foreign professionals, managers and executives who need to earn at least S$4,500 a month and have acceptable qualifications.

S pass holders are mid-level skilled workers who have to earn at least S$2,500 a month, while work permits are given to semi-skilled foreign workers such as construction workers, foreign domestic workers or confinement nannies.

Mr Leong said that PSP proposes imposing a S$1,200 monthly levy on employment pass holders, which he estimated would generate S$2.7 billion of revenue for the Government every year.

“This levy will differentiate the true foreign talents, who are high-salaried and less affected by the S$1,200 levy, from the foreign talents who are simply cheap labour that compete unfairly with Singaporeans and on whom our economy has become overly dependent,” he said.

Mr Leong’s suggestion prompted Ms Gan Siow Huang, Minister of State for Manpower, to defend the employment pass system. She explained that the Ministry of Manpower regularly reviews the qualifying criteria for employment pass holders in its efforts to constantly rebalance the resident and foreigner mix.

She added that imposing a blanket levy on all employment pass holders would be sending a signal to foreign investors that Singapore does not welcome them to bring their own talents here.

Ms Gan also brought up an earlier controversy involving Mr Leong when he said, in his maiden speech in Parliament last September, that he was disappointed that Singapore’s largest bank DBS did not have a home-grown chief executive officer.

The current CEO of DBS is Mr Piyush Gupta, who was born in India but became a citizen in 2009 after many years as a permanent resident here.

Ms Gan said: “I cannot help but come to the conclusion that Mr Leong and the PSP do not believe that Singapore should be an open city, connected to the world, having locals and foreigners complementing each other. And he wants Singapore to close up for the top jobs to be given to Singaporeans only.” 

Mr Leong clarified that he is not against foreigners complementing the resident workforce, but that he believes that the efforts to rebalance the workforce between these two groups are not moving fast enough.

He also questioned whether there are policies to ensure Singaporeans are treated fairly compared to foreigners.

Bringing up the case of OCBC bank recently appointing Hong Kong-based Helen Wong to be its next CEO, Mr Leong again questioned whether there is a preference for employers to hire foreigners, particularly in the financial sector.

“What is MAS doing?… During my time in the '80s and '90s, localisation is almost a must in our financial sector,” he said.

“Today, there doesn't seem to be even a KPI (key performance indicator) among MAS officials. That is what PSP and I are concerned about. The rebalancing. And we have to do the rebalancing as soon as possible and as fast as possible.”

This prompted Mr Ong to rise and issue a sharp rebuke to Mr Leong for his remarks, which he said were “grossly unfair” and “grandstanding”.

Admitting that he is “a little disturbed” to hear them, Mr Ong said that MAS has put in place several initiatives to open up Singapore and establish it as a financial sector, and get universities up to speed in terms of producing enough finance graduates.

With the opening up, he said that competition is tougher.

“Of course, we always wish there’s a menu that says we get all the jobs but yet (there's) no competition. But I’m sorry, there is no such menu. The menu is: Open up, more competition, but we build capabilities and we can seize more opportunities,” Mr Ong said.

Mr Leong then apologised for his remarks on MAS, but said that more can be done to increase the proportion of Singapore workers in the finance sector.

For example, he questioned why foreigners make up 30 to 40 per cent of senior executives in retail banking, and not a lower proportion, when the business segment is mainly catering to the domestic market.

In response, Mr Ong said that it is essentially because Singapore is a global financial centre.

“I think I also come to the same conclusion as (Minister of State) Gan Siow Huang that the PSP position is that I think you want Singapore to close up and protect the jobs, which is fine. It’s entitled to that view. But I think the Government and MAS have a different view,” he said.

He also accepted Mr Leong’s apology and thanked him.

Related topics

Employment Pass foreign talent MAS NCMP Leong Mun Wai Ong Ye Kung levy

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